Date
21 July 2017
COSCO is one of the 14 state-owned enterprises that had falsified their accounts, the national auditor found. Photo: Bloomberg
COSCO is one of the 14 state-owned enterprises that had falsified their accounts, the national auditor found. Photo: Bloomberg

National auditor reveals fraud at Chinese state-owned firms

Some of China’s biggest state firms falsified revenue and profits, Bloomberg reported, citing the National Audit Office.

It also said some state banks doled out loans to unqualified borrowers. 

Fourteen state-owned enterprises, including State Grid Corp., COSCO Group and China Southern Power Grid Co., falsified 29.8 billion yuan (US$4.8 billion) in revenue and 19.4 billion yuan in profits, the auditor said in a statement on its website Sunday as it issued its 2014 work report. 

The office said a key focus of its work last year was revealing violations in the approval, allocation and management of public funds, state-owned assets and resources.

The comments come amid an antigraft campaign by President Xi Jinping — who calls corruption a threat to the Communist Party’s survival — that has snared about 100,000 officials in the past two years.

Inadequate due diligence and violations in decision-making procedures had cost the firms as much as 1.64 billion yuan in wasted resources and 35.4 billion yuan in “losses or idle assets”, the auditor said.

The statement said 4 billion yuan had been recouped from the state-owned companies and more than 250 people had been penalized.

The audit office said it handed over 56 serious cases to “relevant departments”.

Violations also were found in the financial industry.

About 16.8 billion yuan in loans from Bank of Communications Co. (03328.HK), China Development Bank Corp. and China Export & Credit Insurance Corp. were found to have violated rules.

China Development Bank, a policy lender, broke rules on 13 billion yuan of loans it disbursed since 2005, while Bank of Communications, China’s fifth-largest bank by market capitalization, was found to have given out 3.8 billion yuan of loans to unqualified projects and companies between 2008 and 2014, the auditor said.

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