On June 5, the Bank of Hangzhou issued an announcement stating that its board of directors passed the bill to cancel the renewal of PricewaterhouseCoopers as an accounting firm for 2024 by full vote.
As for the reason for changing the accounting firm, the Bank of Hangzhou stated that it was “due to recent related matters requiring further verification” and was based on the principle of “prudence.” In addition, the company will hold a separate board of directors and submit it to the shareholders' meeting to consider the 2024 accounting firm.
According to the previous announcement issued by the Bank of Hangzhou on April 19 regarding the renewal of the accounting firm, the Bank of Hangzhou plans to pay 3.51 million yuan (of which the internal control audit fee is RMB 760,000) for the 2024 audit business, which is the same as in 2023.
Looking at previous data, PricewaterhouseCoopers has been the auditor of the Bank of Hangzhou since 2019. The audit fee for that year was 2.675 million yuan, the audit fee for 2020 was 3.18 million yuan, 3.38 million yuan in 2021, 3.53 million yuan in 2022, 3.51 million yuan in 2023, and the total audit fee for 5 years was 16.275 million yuan.
Prior to that, China Merchants Bank was the first PwC listed bank to “cancel” an order. According to the CMB announcement, the accounting firms to be appointed by the company in 2024 were changed from PricewaterhouseCoopers and PricewaterhouseCoopers and PricewaterhouseCoopers as announced in September 2023 to Ernst & Young Huaming Certified Public Accountants (Special General Partnership) and Ernst & Young.
According to an earlier announcement from China Merchants Bank, it will pay 27.5 million yuan to PwC's 2024 financial report audit fee, which is considered a relatively large PwC customer.
In April of this year, an anonymous letter entitled “Who brought PricewaterhouseCoopers into the Evergrande fire pit” went viral in the market, starting a “vortex of public opinion.”
What followed was the Evergrande storm. On May 31, the Securities Regulatory Commission issued a penalty decision on the fraudulent issuance of Evergrande Real Estate bonds and illegal credit disclosure violations. Evergrande Real Estate was ordered to make corrections, give a warning, and fined 4.175 billion yuan; Xu Jiayin was warned and fined 47 million yuan.
As an audit agency that has cooperated with us for more than ten years, PricewaterhouseCoopers did not present these illegal and irregularities in the audit report during the inspection of Evergrande Real Estate, but instead made a standard unqualified audit report. At the time, the regulatory authorities also indicated that they were proceeding with investigations into relevant intermediaries.
Until around June, PricewaterhouseCoopers lost major orders, and many listed companies accelerated their split with PwC, including CNPC, China People's Insurance, China Merchants Port, China Taiping, China Railway, Mindray Healthcare, etc.
According to incomplete statistics from Blue Whale News, A-share listed banks that plan to renew PricewaterhouseCoopers as auditors for 2024 also include Minsheng Bank, Bank of Shanghai, Bank of Ningbo, and Bank of Suzhou. The audit fees are 9.89 million yuan, 5.3 million yuan, 3.23 million yuan, and 3.65 million yuan, respectively.
Currently, these banks have not refunded orders, but it is still unknown whether these resolutions will change in the future.