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Dozens of PwC China partners have left their roles in recent months in the wake of a ban over its audit of failed property developer Evergrande.
The firm’s mainland China entity disclosed to a finance ministry database of certified public accountants in December and January that 66 people were “no longer partners”, though it is unclear if they have left the firm.
The disclosures are made whenever partners join or step aside from the partnership.
A separate registry shows the mainland firm had 277 registered equity partners as of Tuesday, including 65 of the departing partners, indicating a cut of more than 20 per cent.
The reduction in PwC China’s partner ranks is the biggest in five years and comes after authorities imposed a six-month ban in September and fined the firm more than $60mn for “concealing or even condoning” fraud during its audit of Evergrande.
The disclosure highlights the toll on PwC as it navigates the aftermath of regulatory scrutiny. The reduction is far greater than at its Big Four rivals Deloitte, EY and KPMG, which each reported single-digit partner departures last year.
In September 2023, a year before the ban, PwC China had 1,048 partners, both equity and non-equity, in the mainland and Hong Kong, according to disclosures.
“Over the past several months, PwC China has been reshaping its business,” said a firm spokesperson. “As we have gone through this process some partners have retired from the firm.”
Among those who are no longer partners are Raymund Chao, former chair of PwC Asia-Pacific and China; Gavin Chui, former finance chief of PwC China; Jim Chen, a Beijing-based partner overseeing state-owned enterprise clients; and Bur Chan, who previously led the firm’s auditing division in northern China.
Several partners at PwC China’s Guangzhou branch, which was forced to disband following the Evergrande fine, are also no longer in their roles.
Chinese regulations in effect bar state-owned and mainland-listed companies from hiring auditors that have been fined in the past three accounting years.
An analysis of the affected partners’ client base suggests PwC has lost state-owned and finance sector customers, said Fan Zhongwen, an accounting professor at City University of Hong Kong. “Without clients, many just can’t keep their positions as partners any more.”
Several former PwC partners have joined competitors, including EY and RSM, after their clients switched auditors, according to public information from rival firms.
PwC China lost about two-thirds of its accounting revenues from mainland-listed clients in the first half of 2024, the Financial Times reported in July. It has been battling to retain its remaining client base, which includes privately held companies and Hong Kong-listed groups such as Alibaba and Tencent.
The fine, and lawsuits against PwC including one from Evergrande’s liquidators, have heaped costs on the firm.
Last year, PwC parachuted in Hemione Hudson, a senior UK partner, to oversee its China business.
Additional reporting by Stephen Foley in New York
