PwC names in-house executive as its new China head amid regulatory scrutiny

PricewaterhouseCoopers (PwC) has named in-house executive Daniel Li as its new China head, a move that comes as it faces investigations by financial regulators in mainland China and Hong Kong.
 

PwC said in a statement to Reuters on Wednesday that Shanghai-based Li assumed the role of chairman of PwC China and Asia Pacific with effect from July 1, taking over from Raymund Chao who retired on June 30.
 

The firm came under the Chinese regulatory spotlight earlier this year for its role as the auditor of troubled property company China Evergrande Group.
 

The China Securities Regulatory Commission in March found Evergrande had overstated revenue at its main unit Hengda by 564 billion yuan ($78 billion) over two years through 2020.
 

The auditor is facing a record fine of at least 1 billion yuan and a halt to operations at some of its mainland China offices, Bloomberg reported in late May, as a result of those regulatory findings.
 

Hong Kong's audit watchdog has also been probing the firm since April after a letter from a whistleblower alleged potential deficiencies in PwC's systems of quality management and the quality of the audits of Evergrande.
 

The same regulator has since 2021 been probing Evergrande and PwC over the developer's financial accounts.
 

The firm is also under investigation by lawyers appointed by the liquidators of China Evergrande Group as they try to recoup losses for creditors, Reuters reported last month.
 

PwC has been losing clients in the Chinese mainland since the Evergrande saga, mainland media reported. A calculation by Chinese media outlet Yicai in June found 33 Chinese listed companies had dumped PwC as their auditor.
 

Li has become the first executive from mainland China to lead one of the Big Four accounting firms in China, according to the PwC website.
 

He has been with PwC for more than 30 years, and has extensive knowledge and experience in initial public offerings, mergers and acquisitions, and inbound and outbound transactions, the website added.