¿Qué implicaciones tendrá el caso de Evergrande para las 'Big Four'?

A recent Hong Kong court ruling raises concerns about the potential repercussions of the Evergrande case for the Big Four accounting firms. The liquidators of the collapsed Chinese real estate group Evergrande may be able to sue the multinational firm PwC for global negligence due to deficiencies in the firm's audits, according to a judge's decision. This case will test the partnership model of the Four Big accounting firms.

A Hong Kong magistrate authorized the Evergrande liquidators to continue their negligence lawsuit against PwC International, the global parent organization of the network, along with its Hong Kong and mainland China subsidiaries, which were responsible for auditing Evergrande. The judge at the Hong Kong High Court, Patrick Fung, stated that PwC International had a duty to act with reasonable care towards Evergrande.

The liquidators are demanding approximately $8.4 billion in damages from the three entities, following findings by regulators that PwC auditors in Hong Kong and mainland China did not meet professional standards when approving Evergrande's accounts. This ruling represents a victory for Eddie Middleton and Tiffany Wong, liquidators of Alvarez & Marsal, who have focused much of their legal attention on suing PwC for negligence, given the difficulty in recovering Evergrande's assets in mainland China for creditors.

Evergrande, one of China's largest real estate developers, defaulted in 2021 with liabilities valued at around $300 billion. It was later discovered that the company had fraudulently inflated its revenues prior to its collapse. In April, PwC Hong Kong agreed to pay HK$1.3 billion (US$166 million) to resolve claims related to Evergrande with local regulators.

In 2024, its mainland China subsidiary paid a fine of CNY441 million (US$66 million) after the Ministry of Finance of Beijing determined that PwC employees had hidden or tolerated fraud within the real estate group.

Unlike traditional multinationals, the Big Four use a network structure, maintaining national audit firms legally separate, which are coordinated through a global organization that manages the brand and enforces common standards. The system is designed to comply with different national audit regulations and to protect each member firm from legal liability stemming from audit failures in other countries.

The Hong Kong ruling threatens to affect the rest of the PwC network, where the largest firms, including those in the US and UK, absorb most of PwC International's financing costs. The liquidators of Evergrande argue that PwC International should be considered responsible for the deficiencies of its Hong Kong and mainland China subsidiaries, which allowed the property group to distribute $6 billion in dividends between 2017 and 2020 despite its financial situation. They are demanding $5.6 billion from PwC International.