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China Evergrande Seeks Judicial Review Over SFC-PwC Agreement, HKD1B Reserved to Compensate Shareholders
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According to Ming Pao, China Evergrande, which is undergoing liquidation, has applied to the High Court for a judicial review after the Securities and Futures Commission (SFC) earlier reached an agreement with PricewaterhouseCoopers Hong Kong (PwC Hong Kong), the auditor responsible for auditing China Evergrande, to reserve HKD1 billion to compensate the company’s independent shareholders. Documents filed for the judicial review show that China Evergrande believes that, from the perspective of the applicable regulatory and legal framework, PwC Hong Kong, in its capacity as a certified public accountant acting as the auditor of China Evergrande, is not a regulated person under the Securities and Futures Ordinance. Instead, the Accounting and Financial Reporting Council (AFRC) is the regulatory authority responsible for the registration, inspection and disciplinary records of public interest entity auditors such as PwC Hong Kong. Therefore, the SFC does not have freestanding power to reach an agreement with PwC Hong Kong. China Evergrande also pointed out that when reaching the settlement, the SFC failed to consider whether the agreement would unfairly prejudice the creditors of China Evergrande. The documents mentioned that China Evergrande, which has been taken over by liquidators from Alvarez & Marsal, proposed in May to establish an open and cooperative dialogue and requested further information regarding the agreement. China Evergrande also asked the SFC to refrain from taking any further action under the agreement until the final outcome of its civil litigation against PwC. However, the SFC rejected the liquidators’ request. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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