PwC partner named in fraud claim advised to lawyer up

Hong Shao attempted to force The Australian to remove articles detailing the allegations against her and said she was concerned the firm would take ‘extreme action’.

Ms Shao in 2018 became the first China-born partner appointed by PwC Australia. Picture: Krisztian Bocsi/Bloomberg

The PwC partner accused of an involvement in a $3.3m fraud scheme run by her husband was asked by the professional services firm to take two weeks of leave and to “bring a lawyer” to their next meeting, new documents lodged in court claim.

Hong Shao, in an affidavit filed as part of an attempt to force The Australian and Daily Mail Australia to remove articles detailing the allegations against her, said she was concerned PwC would take “extreme action” to “protect the brand”.

Ms Shao went on leave last week to respond to “this personal matter”. The firm had not been aware of the allegations until contacted by The Australian for comment, a note sent to staff said.

No charges have been laid against either Ms Shao or her husband, Di Wu, and deny the allegations against them in a civil claim by Creative Promotions. They are yet to file a defence.

The company alleges that over 12 years, Mr Wu “obtained money dishonestly and fraudulently’’ from it by issuing fake invoices.

The money was allegedly sent to at least eight accounts at the Bank of China, JP Morgan Chase, Bank of America, the Agricultural Bank of China and HSBC.

The payments were allegedly later routed back to Mr Wu’s Westpac account and a Bank of China account in Ms Shao’s name, and were used to buy a Porsche Cayenne and pay for renovations to the family home in the Sydney suburb of Lindfield.

Mr Wu was employed by Creative Promotions, a Sydney-based advertising materials business, in 2005 as an overseas production assistant.

The company’s statement of claim alleges Ms Shao, an assurance partner at PwC, “assisted Mr Wu in operating the scheme’’, had “actual knowledge’’ of the essential matters of the scheme, “or, in the alternative, shut her eyes to the obvious’’.

Ms Shao’s affidavit, lodged as part of her action against The Australian, says that at 9.43pm on Monday November 21 – the day the first article was published – she received a message from a partner at PwC asking her to attend a meeting the following day.

Ms Shao says she met with two senior partners, after which she had a conversation with her husband, Mr Wu, about the meeting.

“They asked me to take two weeks’ leave and next meeting I need to bring a lawyer. I do not feel good about this,’’ the affidavit quotes her as saying.

“The firm is not interested in the case as it is my personal matter, but the article reflected so badly on the PwC brand. Leadership is concerned. To protect the brand, I will not be surprised if the firm takes extreme action.’’

Ms Shao said she agreed not to talk to her clients or colleagues about the matter, and was concerned about what her clients would be thinking. “This reflects really, really badly on you,’’ her husband is quoted as saying. “Your personal reputation is ruined. Your career is ruined.’’

Ms Shao was seeking an injunction to force The Australian and Daily Mail Australia to remove previous articles on the matter. It was not granted.

Creative Promotions alleges the couple spent the proceeds of the alleged scheme, which total $US2.17m ($3.19m), were at least in part paid into accounts of one or both of Mr Wu and Ms Shao, and were used in part to pay the mortgage of a house in the northern Sydney suburb of Lindfield purchased in 2016 for $2m.

Mr Wu and Ms Shao are yet to file a defence to the claims.

Originally published as PwC partner named in fraud claim advised to lawyer up