Big 4 Accounting Firms Fear China Wrath After Newspaper Ad Supporting Hong Kong Protests

The world's four largest accounting firms, known as the 'Big 4', have responded to a full-page advertisement in Hong Kong’s Apple Daily where some, claiming to be their employees, have expressed support to the pro-democracy protesters who have been demonstrating for nearly 3 months now. The four firms and their 2018 revenue in U.S. dollars are as follows:

• Deloitte, based in New York made $43.2 billion
• PwC (PricewaterhouseCoopers), based in London earned $41.3 billion
• EY (Ernst & Young), based in London earned $34.8 billion
• KPMG (Klynveld Peat Marwick Goerdeler), based in Amstelveen, Netherlands earned $28.96 billion

The four firms collectively employ tens of thousands of people in Hong Kong and Mainland China and they all responded by distancing themselves from the ad saying it does not represent the views of the companies.

Deloitte’s response was, "While we cannot verify the source of the statement and we respect the right of individuals to peacefully express their views, we want to clarify that this statement does not represent the views of the firm.”

EY chimed in that it could not confirm if the ad was authentic, adding that "it doesn't share the views expressed in the statement." PwC stated that "they firmly oppose any action and statement that challenge national sovereignty."

KPMG simply said "it opposes any illegal acts and violence, " but added, “we hope that Hong Kong remains peaceful and continues to prosper as one of the world's most important international financial centers based on the rule of law and the principle of 'One Country, Two Systems.” This was in reference to the system that affords the city political and legal freedoms not enjoyed by those on the Chinese mainland.

The full-page ad was mostly a repeat of five demands by the protesters including the original demand for a withdrawal of a controversial Chinese extradition bill. Other demands are for the Hong Kong leader Carrie Lam to step down, dropping criminal charges against the protesters and to form an independent commission focused on police misconduct.

The higher executives at the Big 4 are likely concerned that heads will roll based on what happened at Cathay Pacific, an international airport based in Hong Kong. Some of the airline’s employees participated in the protests last week that shut down the airport for several hours. The CEO and chief commercial officer were forced to step down and control of the airline was surrendered to China.

This could mean that Beijing is now more willing to pressure companies over the protests and that other companies might face similar action.