Bank of Ningbo issued an announcement to cancel the proposal on hiring an external audit firm that has been approved by the shareholders' meeting of 2023. Wind statistics show that there are a total of 107 A-share listed companies audited by PwC in the 2023 annual report, among which there are 6 banks.
Another bank has announced the termination of its contract with PwC. On the evening of June 21st, Bank of Ningbo announced the cancellation of the Proposal to Hire External Audit Institutions that has been approved by the 2023 Annual Shareholders Meeting, which is also another bank to announce the cancellation of cooperation with PwC after CM Bank, Bank of Hangzhou, and so on.
Specifically, on June 20th, Bank of Ningbo held the fourth temporary meeting of the eighth board of directors, which approved the Proposal to Cancel the Renewal of External Audit Institutions in 2024. As for the reason for cancellation, Bank of Ningbo said that after negotiating with PwC Zhongtian Accounting Firm (Special General Partnership), due to the need for further verification of recent related matters, and based on the prudential principle, the company decided to cancel the Proposal to Hire External Audit Institutions that has been approved by the 2023 Annual Shareholders Meeting. This board of directors' deliberation and subsequent re-appointment of external audit institutions in 2024 will be submitted to the Shareholders' Meeting for deliberation at the same time.
Our reporter found that this happened only two months after Bank of Ningbo announced that it would renew the cooperation with PwC as the audit institution for 2024. According to historical announcements, at the sixth meeting of the eighth board of directors held on April 8, 2024, Bank of Ningbo announced that in order to ensure the continuity of the audit work, it planned to renew the cooperation with PwC as the audit institution for the company in 2024.
In fact, several banks have already announced the cancellation of hiring or renewing PwC as their audit institutions. On June 5th, Bank of Hangzhou announced that the proposal for renewing PwC as the accounting firm for 2024 has been cancelled by the board of directors. On the evening of May 27th, CM Bank announced that it plans to appoint EY as the audit institution for 2024, while the bank had previously announced on September 27th, 2023 that it plans to appoint PwC as the accounting firm for 2024.
Bank of China has adjusted the related business responsible by PwC. According to the announcement disclosed by Bank of China on the evening of June 7th, based on the prudent principle and considering the bank's business needs, and combining with market information, it agreed to adjust the previous arrangement of renewing PwC and Crowe Horwath (CH) to provide annual audit services to hiring them to provide professional services such as the 2024 interim financial report review. It agreed to initiate the work of selecting and appointing external audit institutions for 2024.
According to Wind statistics, there are a total of 107 A-share listed companies whose 2023 annual report audit agencies are PwC. Among them, six are banks, including Bank of Hangzhou, Bank of Ningbo, Bank of China, Bank of Shanghai, Bank of Suzhou, and Minsheng Bank. Except for the banks that have announced the cancellation of renewing PwC as their audit institution for 2024, Bank of Shanghai, Bank of Suzhou, and Minsheng Bank have not yet expressed their stance. According to previous information, Bank of Shanghai and Bank of Suzhou have both announced plans to renew the cooperation with PwC in April, while Minsheng Bank announced plans to renew the cooperation with PwC and CH as the auditors of the bank's 2024 financial report audit company at the end of March.
In addition to listed banks, many other industry-listed companies have recently announced the termination of their contract with PwC. The market generally believes that this may be related to the Evergrande incident. It is reported that on March of this year, Evergrande Real Estate Group Co., Ltd. issued an announcement on receiving the pre-notification letter of administrative penalties and market bans from the China Securities Regulatory Commission, which showed that the 2019 and 2020 annual reports disclosed by Evergrande Real Estate contained financial fraud. PwC is the auditing institution of Evergrande, and it issued standard unreserved opinions.