State-owned financial firms asked to ditch PwC

Chinese regulators have in recent months asked several large state-owned clients of PricewaterhouseCoopers to drop the auditor as it braces for penalties over its work for troubled property developer Evergrande (3333), said two sources.

The regulators, mainly the Ministry of Finance, have given so-called "window guidance," or unofficial, verbal instructions to big state-owned financial institutions since at least April, said the sources who declined to be identified as the information was confidential.

Bank of China (3988), China Life Insurance (2628), PICC (1339), China Taiping Insurance (0966), and China Cinda Asset Management (1359), are now among the more than 30 listed Chinese companies that have axed PwC as auditor this year, according to a Reuters calculation based on corporate filings.

PwC declined to comment. The MOF did not respond to a request for comment. BOC, China Life, PICC, China Taiping and China Cinda also did not respond to a request for comment.

The MOF is the biggest shareholder in more than 20 large state financial institutions including the Big Five banks, four insurers, and four bad debt managers, with stakes held directly or via other state entities such as Central Huijin.

The ministry is also the primary regulator of auditors in China. It is not immediately clear if all state firms had received the "window guidance" from the ministry or other government bodies.