HONG KONG, June 14 (Reuters) - Lawyers appointed by the

liquidators of China Evergrande Group ( EGRNF ) are

investigating some of the property developer's service providers

including its former auditor PricewaterhouseCoopers, to

potentially recoup losses for creditors, three sources said.

Evergrande, once China's largest property developer, was

ordered to be liquidated by a Hong Kong court in January, after

it failed to deliver a concrete restructuring plan for its $23

billion worth of offshore debt deemed to be in default.

As part of the liquidation process, Hong Kong-based law firm

Karas So is working with the two court-appointed Evergrande

liquidators, Tiffany Wong and Eddie Middleton from Alvarez and

Marsal (A&M), said the three sources, who have knowledge of the

matter.

The move, which is common in liquidation cases, indicates

initial steps being taken towards liquidation of the world's

most indebted property developer with more than $300 billion of

total liabilities.

A&M, Evergrande, and Karas So declined to comment, while

PricewaterhouseCoopers (PwC) did not immediately respond to

Reuters' request for comment.

Evergrande's liquidation could take more than a decade to be

completed, according to some offshore investors, and become a

blueprint for future major Chinese corporate winding up

processes.

Reuters reported in March, citing sources, that lawyers

working on Evergrande's liquidation will look for evidence of

wrongdoing and negligence across the company, its management and

external advisers that could have led to it defaulting on its

debt.

Karas So, which specialized in liquidation-related legal

matters, is looking into Evergrande's insolvency and whether

some service providers to the embattled property developer

played a role in the rapid fall in its financial profile.

Apart from PwC, Karas So has also been examining the roles

played by other institutions that provided financial and other

services to Evergrande, said one of the sources.

All the sources declined to be named as they were not

authorised to speak to the media.

It is not clear when Karas So and A&M will take actions, if

any, after the completion of the investigation.

PwC has been in the spotlight in China since the China

Securities Regulatory Commission earlier this year found

Evergrande had overstated revenue at its main unit Hengda by 564

billion yuan ($78 billion) over two years through 2020.

The auditor is facing a record fine of at least 1 billion

yuan and a halt to operations at some of its mainland China

offices, Bloomberg reported in late May, as a result of those

regulatory findings.

Hong Kong's audit watchdog has also been probing Evergrande

and PwC since 2021 over the developer's financial accounts. It

initiated another probe against PwC in April after a whistle

blower letter alleging auditing deficiencies became public.

If legal claims are filed against PwC or other service

providers, Evergrande's liquidation might set an example for

other liquidators that are likely to move towards recovering

financial losses for creditors, said industry insiders.

At least five Chinese developers have been ordered by the

Hong Kong court to be liquidated since the property debt crisis

in the world's second-largest economy unfolded in 2021, while

liquidation court proceedings are going on against a few others

($1 = 7.2549 Chinese yuan renminbi)