Offering public-funded posts to relatives and friends and promoting them to high, powerful positions is a common practice of executives of State-owned enterprises seeking to hide corruption. Sometimes all key positions can be occupied by relatives of the head of an SOE such that it is a family union.
Such inbreeding is detrimental to the political ecology within SOEs because it helps form interest groups. Besides, corrupt SOE executives also use them to form alliances against any anti-graft investigation from the outside, making it difficult for the disciplinary agencies to do their job.
Worse, the nepotism and the corruption that follows often hurt the business activities of the SOEs, and make them no match for global competitors.
On Tuesday evening, China's top anti-graft watchdog posted on its website the reports from 15 inspection teams sent to investigate leading central SOEs. This is the first time that words and phrases such as "inbreeding" and "group corruption" have been used by the top disciplinary agency, which is seen as another sign of central leadership's determination to curb rampant corruption among SOEs.
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