20 October 2018
Overseas assets of Chinese SOEs are subject to little or no auditing. Photo: Bloomberg
Overseas assets of Chinese SOEs are subject to little or no auditing. Photo: Bloomberg

China SOE overseas assets not audited

China does not audit the 4 trillion yuan (US$637 billion) of assets its state-owned enterprises (SOEs) hold overseas, Xinhua reported.

That will hinder the government’s attempt to expand its anticorruption drive to SOEs, Reuters said.

Antigraft authorities will inspect major SOEs this year, state media reported in January, as part of a campaign initiated by President Xi Jinping that has brought down numerous high-ranking executives.

SOE overseas assets are “virtually not audited”, Xinhua quoted Dong Dasheng, a former deputy auditor general in the National Audit Office, as saying.

Official figures showed the value of assets at about 110 SOEs totaled 35 trillion yuan at the end of 2013.

Of that amount, 12.5 percent was overseas, meaning over 4 trillion yuan in assets was not subject to a detailed government audit.

Among the 110 SOEs, 57 are officially audited, and the remainder are subject to various authorities, Dong said.

Their swift expansion overseas has created gaps in coverage, he said.

“This does not satisfy the legal responsibilities of the auditors,” said Dong, who is a member of the Chinese People’s Political Consultative Conference.

All SOEs, including their foreign investments, should be audited every one or two years, with a particular focus on revenue and expenditure, he said.

Major reorganizations, acquisitions, disposals, transfers and significant projects should be subject to “special auditing tracking”, Dong said without elaborating.

The Xinhua report came after the Central Commission for Discipline Inspection said it would strengthen a campaign to seek international cooperation in tracking down economic fugitives and ill-gotten overseas assets.

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