China fines Deloitte $30.8 million over failed audits
The Chinese government says the Beijing office of Deloitte Touche Tohmatsu was fined $30.8 million for failing to properly audit a state-owned asset management firm
BEIJING — The Beijing office of Deloitte Touche Tohmatsu has been fined $30.8 million for failing to adequately audit a Chinese state-owned asset management firm whose former director was sentenced to death for corruption.
The office was also ordered to suspend operations for three months for mishandling audit and other work at China Huarong Asset Management Co. in 2014-19, the finance ministry said Friday.
Deloitte was fined 211.9 million yuan ($30.8 million), the ministry said. He said Huarong was fined a total of 800,000 yuan ($116,000) and 13 employees were fined a total of 250,000 yuan ($36,000) for their roles in faulty audits.
Huarong is one of four entities created in the 1990s to buy up nonperforming loans from public banks. They have expanded into banking, insurance, real estate finance and other areas.
Former Huarong chief Lai Xiaomin was sentenced to death in 2021 for embezzlement and bribes in exchange for investments, construction contracts and jobs.
Regulators concluded Deloitte failed to pay sufficient attention to Huarong’s management activities, assets and compliance issues, the finance ministry said.
In a statement released to Chinese media, Deloitte said it accepted the sanction and expressed regret that regulators found aspects of its audit did not meet standards.
ABC
