Hemione Hudson, who was on the shortlist to take over as PwC’s UK boss this year, will now lead its Chinese division
Tuesday September 10 2024, 11.15am BST, The Times
PwC is sending one of its most senior British executives to China with orders to steer the firm’s business in the country through the fallout from its audits of Evergrande, the collapsed property developer.
Global leaders at the Big Four professional services group have asked Hemione Hudson, who was on the shortlist to take over as PwC’s UK boss earlier this year, to lead the Chinese division.
Sources suggested she would be working in China indefinitely and that a return date had not been set. News of her move was first reported by the Financial Times. A spokesman for PwC declined to comment.
PwC’s operation in China is its third largest network with about 20,000 employees, behind only the United States and Britain. The firm is under the spotlight having been the auditor for Evergrande for 14 years from 2009-23.
Evergrande was once China’s biggest property developer. It took on debts of more than $300 billion, but defaulted on repayments in 2021. Its problems spread panic through financial markets and preceded a wave of defaults from other players in China’s struggling property industry.
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This year Chinese regulators said that Evergrande had committed fraud, overstating its sales by tens of billions of dollars between 2019 and 2020. The group’s liquidation has been ordered.
An investigation into PwC’s audits of the group’s accounts is being carried out by the Chinese authorities, the outcome of which is expected soon. PwC China has been telling clients that it is bracing itself for a heavy fine and a six-month business ban. Several companies, especially those with links to the Chinese state, have dropped PwC as their auditor this year.
Daniel Li is the boss of PwC China, having previously run its audit business. He was elected by his fellow partners last year, but his term began only in July. It is unclear what his role will be now that Hudson has been appointed.
Hudson, 50, lost out to Marco Amitrano in the race to become PwC’s new UK chairman and senior partner after the retirement of Kevin Ellis. She is a PwC lifer, having joined straight from the University of Durham in 1995. She had been the UK head of audit for five years until this summer, when Amitrano, 54, promoted her to chief network officer on his new leadership board.
Her latest move adds to 18 months of upheaval at the top of PwC, during which the leadership of its global network, as well that of its three largest member firms in America, Britain and China, has changed after scheduled elections.
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It is not the first time that PwC has drafted in a British partner to help to run one of its struggling member firms. Last year Kevin Burrowes, 62, was made boss of the Australian business, the reputation of which had been severely damaged by a tax scandal.
Employing the same tactic in China has raised a few eyebrows, given that the Chinese government has been pushing for businesses to ditch the Big Four and to hire local accountants instead, as part of Beijing’s efforts to protect data security and to rein in the influence of western audit firms.