SOEs learn from audit results

BEIJING - Eleven SOEs responsible for policy breaches and mismanagement say they have corrected most of the problems, and introduced better management and risk-control.

State-owned Assets Supervision and Administration Commission (SASAC), the country's top SOEs regulator, said it would ensure the firms to put things right.

A total of 190 people at 11 SOEs have been punished for policy breaches or mismanagement found during audits last year, according to the reports of the National Audit Office (NAO).

Investment projects, including China National Petroleum Corporation (CNPC) and China Resources, did not go through due procedure, and irregularities were found in financial management and internal regulation, according to NAO reports.

In one case, several affiliates of the CNPC had no open bidding process for projects and purchases involving 26 billion yuan ($4.2 billion).

Affiliates of China Resources purchased vehicles in numbers and at prices far beyond the stipulated limits.

Other irregularities included hefty spending on building golf courses, exaggerating material costs and buying shopping cards for employees.

The NAO said the enterprises have made improvements and retrieved or avoided losses amounting to 3.3 billion yuan.

After the NAO report was published, China Resources said on its website that most of the problems revealed in the report were resolved by the end of May and new mechanisms would both prevent and punish offences.

Concerning the irregularities in its accounting and internal management, China Shipping said it would improve decision-making procedures and improve management.

Other SOEs including China Metallurgical, China Nuclear Engineering, and China State Shipbuilding, all said they had "fundamentally" rectified the mistakes, and China Aerospace Science & Industry Corporation said it had completely corrected its problems.

Friday's reports are based on audits of balance sheets and income statements of 11 SOEs for the year 2012.

China has thousands of SOEs and 113 are directly administered. These enterprises are the backbone of the economy, but are notorious for their monopolies, unchecked spending and corruption.

The NAO tracked several leads on illegal activities and transferred them to related authorities. "The results of the cases will be released after investigation," the NAO added.

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