Hong Kong court says Evergrande liquidators can pursue claim from PwC International

A Hong Kong court dismissed on Wednesday an application by PwC International to exclude the firm from a claim made by China Evergrande Group's liquidators.

• The liquidators are seeking 57 billion yuan (US$8.48 billion) in damages from PwC International, PwC HK and PwC's China arm, accusing them of being negligent in auditing work. The maximum amount that PwC International could be liable for is 38 billion yuan.
• PwC International argued in a hearing in May that it should not be a party to the case as the Hong Kong and China entities were not its subsidiaries and it had no communication with Evergrande.
• In a judgement on Wednesday, the court said PwC International did owe "a duty of care" to Evergrande.
• "I take the view that not all the facts are known and, hence, it is crucial that there should be discovery of documents and interrogatories administered, which I believe will throw more light on the case. In such circumstances, the Plaintiff should not be driven from the judgment seat without a trial," Deputy High Court Judge Patrick Fung wrote.
• The liquidators said they welcome the court's decision, even though the decision does not determine the ultimate merits of the claims.
• They added they will continue to investigate Evergrande's affairs and pursue recoveries for the benefit of creditors.
• The Hong Kong High Court ordered Evergrande, which had defaulted on most of its US$300 billion in liabilities, to liquidate in 2024 and appointed Edward Middleton and Tiffany Wong of Alvarez & Marsal as liquidators.
• Last week, Evergrande founder Hui Ka Yan, once Asia's richest man, was sentenced to life in prison by a Chinese court, which also ordered all his personal property confiscated.

Reuters

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