Hong Kong’s audit watchdog said on Monday it had launched an investigation into the financial statements of China’s real estate services unit Evergrande and its former auditor, after the results of an internal investigation by the group raised questions. .
The Financial Reporting Council (FRC) said in a statement that it is investigating Evergrande Property Services’ 2020 and H1 2021 financial statements, as well as PwC’s audit of its 2020 annual accounts.
“The FRC has identified issues around the classification of restricted bank deposits and other loans, the measurement of collateral pledges and the disclosure of related party transactions in the accounts, and related issues around the audits,” he said.
Evergrande Property Services and PwC did not immediately respond to requests for comment.
Evergrande said last month that an internal investigation found that $2 billion in funds held by Evergrande Property Services were pledged as collateral for the group’s debt repayment financing.
In the end, the banks confiscated the money, clearing much of the unit’s cash.
The audit watchdog first announced in October an investigation of Evergrande’s accounts and its audits by PwC, as it had concerns regarding the adequacy of the company’s going concern reports.
Source: CNN Brasil
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