Hong Kong's market regulator is moving forward with a HK$1 billion compensation plan for Evergrande minority shareholders, despite legal challenges from the developer's liquidators. The Securities and Futures Commission will implement detailed provisions of the restitution process, according to a spokesperson. The move underscores the ongoing struggle to recover funds from what was once China's most indebted developer.

The SFC reached an April agreement with Pricewaterhouse Coopers' Hong Kong affiliate, under which PwC set aside the HK$1 billion fund for eligible shareholders without admitting liability. Evergrande's court-appointed liquidators have challenged this deal in a judicial review filing, arguing the SFC exceeded its statutory authority by settling with a non-regulated entity like PwC HK.

Liquidators contend that Evergrande's liabilities far exceed recoverable assets, estimating debt at HK$350 billion, leaving no possibility for shareholder payouts. They argue the city's accounting watchdog should handle the matter instead. This dispute reflects the escalating legal battle over who controls the limited remaining assets of the collapsed developer.

Separately, the liquidators are pursuing their own lawsuit against PwC, suing PwC International and its affiliates for 57 billion yuan ($8.4 billion) in damages. The claims include alleged negligence and misrepresentation in auditing Evergrande's accounts, creating additional complications for fund recovery efforts.