PwC seeks to mend relations with PIF following temporary advisory suspension

In a development that has sent shockwaves through the region’s consulting industry, Saudi Arabia’s sovereign wealth fund PIF has imposed a temporary ban on PwC from securing advisory and consulting contracts.

The sovereign wealth fund, along with its more than 100 subsidiaries, has instructed executives to cease awarding consulting projects to PwC. This decision, effective until February 2026, affects PwC's operations in one of the world’s most rapidly expanding markets and the largest in the Middle East.

The Public Investment Fund (PIF) has not publicly disclosed the exact reasons behind this move. However, PwC told its employees in a memo that the situation related to a “client” matter, and not a regulatory issue.

The ban covers non-audit services, such as strategic consulting, mergers & acquisitions, tax advisory, finance transformation, and more, with PIF one of the region’s largest buyers of such services.

PwC’s auditing services remain unaffected by the suspension, and according to reporting by Reuters, PIF portfolio companies can still engage the consultant.

The Big Four firm has a significant presence in Saudi Arabia, employing over 2,600 people across various locations including Riyadh, Jeddah, AlUla, Al Khobar, and Dhahran. Two years ago, PwC received a license to establish its regional headquarters in Riyadh.

Industry scrutiny?

For the Middle East’s consulting sector, the PIF decision could be a watershed moment for the industry, signalling increased scrutiny and higher expectations for governance and compliance standards among consulting firms operating in Saudi Arabia.

The move will likely prompt other consulting firms to reassess their practices to ensure alignment with client demands and the kingdom’s evolving regulatory landscape. Other firms that have a large number of contracts with PIF and its subsidiaries include McKinsey & Company, Boston Consulting Group, as well as PwC’s Big Four counterparts EY, Deloitte and KPMG.

PwC has meanwhile been quick to respond to the matter. On Friday, an internal memo was sent to employees detailing the firm’s viewpoint and response. Over the past few days, top executives of the company have been in contact with PIF officials with the aim to mend the relations.

Industry suspensions

While such far-fetching moves are rare, they are not unique in an industry which is built on the pillars of trust and clear-cut governance. Recent high-profile examples of bans include those of McKinsey & Company and Bain & Company in South Africa, PwC being suspended from serving Australia’s public sector, and a ban from the European Union on several consultancies two years ago.

Closer to home, Saudi Arabia's Capital Market Authority (CMA) banned Deloitte’s local unit from providing accounting services in the kingdom for two years (around 2016), while in 2022, KPMG was blocked from winning new audit contracts in Abu Dhabi following misconduct.

But with assets under management of around $925 billion, PIF’s ban is of a different order. The fund plays a crucial role in Saudi Arabia’s Vision 2030 agenda, which aims to diversify the kingdom’s economy beyond oil and already helped turn the nation into one of the world’s 20 largest economies.