PwC has sent one of its senior British executives to China to help steer the business of the firm in the country after the audits it conducted on Evergrande, a collapsed property developer.
Hemione Hudson, who was once on the list of candidates to become PwC UK’s boss, has been asked to head the Chinese division by global leaders in the Big Four professional service group.
According to sources, she will be in China for an indefinite period of time and a date for her return has not yet been determined. Financial Times was the first to report on her decision. PwC’s spokesman declined to comment.
PwC has about 20,000 staff in China, which is the third-largest network behind the United States and Britain. Evergrande was audited by the firm for 14 years between 2009 and 23.
Evergrande used to be China’s largest property developer. It had debts exceeding $300 billion but defaulted in 2021. The problems of the company spread panic on financial markets, and led to a wave defaults by other players in China’s struggling real estate industry.
Chinese regulators have said Evergrande committed fraud by overstating sales between 2019 and 2020. A liquidation of the group has been ordered.
The Chinese authorities are currently conducting an investigation into PwC’s audits of group accounts. A conclusion is expected shortly. PwC China told clients it was preparing for a large fine and a business ban of six months. PwC has been dropped as auditor by several companies this year, including those who have ties to the Chinese government.
Daniel Li, who previously ran the audit division of PwC China’s parent company, is now in charge of PwC China. His term was only begun in July. He was elected last year by his partners. Hudson’s appointment has left his role unclear.
Hudson, 50 years old, lost to Marco Amitrano for the position of PwC UK’s new chairman and senior partner following the retirement Kevin Ellis. She has been with PwC since 1995, when she joined the firm straight out of Durham University. She was the UK head for audit for five long years, until Amitrano promoted her this summer to Chief Network Officer on his new leadership team.
This latest move comes after 18 months of turmoil at PwC. During this time, the leadership of the global network as well as the three largest member firms, in America, Britain, and China have changed following scheduled elections.
PwC has not been the first to bring in a British partner as a manager to one of their struggling member companies. Kevin Burrowes (62), was appointed boss of Australia’s business last year, after its reputation had been badly damaged by , a tax scandal.
The same tactic was used in China, which raised some eyebrows. This is because the Chinese government has been encouraging businesses to stop using the Big Four, and instead hire local accountants. Beijing has done this to ensure data security, and to limit the influence of western auditing firms.
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