PwC sends UK partner to China amid Evergrande fallout

PwC is sending out one of its most senior British executives to steer the firm’s Chinese business through the fallout from its audits of Evergrande, the collapsed property developer.
Global leaders at the Big Four firm have asked Hemione Hudson, who was on the shortlist to take over as PwC’s UK boss earlier this year, to lead the Chinese division.
Sources suggested she would be working in China indefinitely and that a return date has not been set. News of her move was first reported by the Financial Times. A spokesman for PwC declined to comment.
PwC’s China operation is the firm’s third-largest network with about 20,000 employees, behind only the US and the UK. It is under the spotlight, having been the auditor for Evergrande for 14 years from 2009-23.
Evergrande was once China’s biggest property developer and took on debts of more than $300 billion, but defaulted on repayments in 2021. Its problems spread panic through financial markets and preceded a wave of defaults from others in China’s struggling property industry.
Earlier this year Chinese regulators said Evergrande had committed fraud, overstating its sales by tens of billions of dollars between 2019 and 2020. The group’s liquidation has been ordered.
An investigation into PwC’s audits of the group’s accounts is being carried out by Beijing officials, the outcome of which is expected imminently. PwC China has been telling clients that it is bracing itself for a hefty fine and a six-month business ban. A number of companies, especially those with links to the state, have dropped PwC as their auditor this year.
Daniel Li is the current boss of PwC China, having previously run its audit business. He was elected by his fellow partners last year but his term only began in July. It is unclear what his role will be now that Hudson is being sent over.
Hudson, 50, lost out to Marco Amitrano in the race to become PwC’s new UK chairman and senior partner following the retirement of Kevin Ellis.
She is a PwC lifer, having joined straight from the University of Durham in 1995. She had been the UK head of audit for five years until this summer, when Amitrano promoted her to chief network officer on his new leadership board.
Her latest move adds to 18 months of upheaval at the top of PwC, which has seen the leadership of its global network, as well that of as its three largest member firms — the US, UK and China — change in 2024 following scheduled elections.
It is not the first time that PwC has drafted in a British partner to help run one of its struggling member firms. Last year Kevin Burrowes was made boss of the Australian business, whose reputation had been severely damaged by a tax scandal.
Employing the same tactic in China has raised a few eyebrows, given that the Chinese government has been pushing for businesses to ditch the Big Four and hire local accountants instead — part of Beijing’s efforts to protect data security and rein in the influence of western audit firms.