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SFC defends HK$1 billion settlement with PwC over Evergrande audit
The SFC said it has broad authority to resolve disciplinary cases through pre-litigation settlements, and urged the High Court to reject Evergrande liquidators’ bid to quash the deal.
Hong Kong’s securities market regulator has defended a HK$1 billion (US$128 million) settlement with PwC Hong Kong tied to an auditing scandal involving China Evergrande Group, arguing it can enforce discipline and protect independent investors, according to SCMP Economy.
At a judicial review hearing on Wednesday, lawyers for the Securities and Futures Commission asked the High Court to dismiss a challenge brought by Evergrande liquidators, who seek to quash the agreement with PwC Hong Kong and cite an alleged abuse of power.
The liquidators’ counsel argued the SFC had broad powers under the Securities and Futures Ordinance to settle disciplinary actions before litigation, while also pointing to concerns that minority shareholders may have been allowed to receive payment first despite uncertainty over PwC’s ability to compensate the developer and its creditors.
Evergrande’s legal team also accused the regulator of bypassing judicial safeguards by threatening legal action against PwC Hong Kong and effectively forcing a payment before the court could assess the merits of the regulator’s position, SCMP Economy reported.