PwC succeeded with a positive ban and six months in China with the Evergrande test

PwC’s China arm has been suspended in the country for six months because of its work on the collapse of Chinese property developer Evergrande.

A Big Four accounting firm is also being fined more than $62m (£47m) after Chinese authorities said it helped cover up fraud at Evergrande.

The real estate company collapsed in January under a mountain of debt.

PwC said it was “disappointed” with the performance of its China division, saying it fell “below expected levels” within PwC in an unacceptable manner.

Chinese authorities said PwC was aware of “serious errors” in Evergrande’s financial statements when it audited the company.

As a result, China’s Ministry of Finance imposed “administrative penalties” and suspended PwC’s business for six months.

In addition, China’s securities regulator has seized the revenue obtained by PwC’s audit of Evergrande and has issued a fine.

An investigation by the regulator said PwC had “severely undermined the basis of law and good faith, and harmed the interests of investors”.

In response to the fines, PwC said it had “taken a number of accountability and corrective measures”, including the dismissal of six partners and the introduction of a system to fine responsible group leaders.

Five other staff have also left, while Hemione Hudson, PwC’s head of risk and control, has been parachuted in to run the China division on an interim basis.

PwC admitted that the work carried out in the audit of Evergrande was “significantly below” the standards expected of the company.

“It does not represent what we stand for as a network and there is no room for this at PwC,” said the company’s global chairman Mohamed Kande.

“That is why, following a thorough investigation, we have made sure that measures are taken to hold those responsible accountable.

“I always trust the Chinese company’s partners and employees as we work together to rebuild the trust of our stakeholders,” he added.

Evergrande, which has a presence in more than 280 Chinese cities and has ventured into other business sectors, has grown stronger, eventually collapsing in January.

Chinese authorities have accused Evergrande and its founder, Hui Ka Yan, of falsely inflating the company’s revenue to $78bn (£61.6bn) and fined and banned him and the business.