It is urgent to fight corruption in SOEs

Zhang Xinhua is led into Guangzhou Intermediate People's Court, Wednesday.[Photo/weibo.com/nfrb]

Absolute power without effective supervision and accountability for leaders of State-owned enterprises is an invitation to absolute corruption. This has been proved by the findings of discipline inspection teams after their investigations of several giant SOEs.

Some SOE leaders paid for mergers and acquisitions in violation of the rules, some deliberately let their private counterparts make huge profits at the expense of their own companies, and some subcontracted their businesses to their own private companies or those owned by their relatives at prices even lower than cost. It is not rare for SOE employees to channel public funds into private firms by whatever means they can for their own gains.

There has long been gossip about the corruption of some SOE leaders, and what the investigation teams have discovered more than proves the truth of the chatter.

With the support of the State and their monopoly use of all resources, these SOEs should be performing much better than they are.

The country's SOEs saw their profits up 3.4 percent last year to about 2.48 trillion yuan ($40.81 billion), but their debts rose 12.2 percent to 6.66 trillion yuan, according to the Ministry of Finance. The dividends they pay to the State was only raised from 20 percent to 25 percent last year. Some have not handed a cent to the State for years.

There is a sharp contrast between how greedily some SOE leaders try to grab public money for themselves by abusing their power and the miserliness of the companies they lead when it comes to paying dividends to the State.

SOE leaders are running these enterprises on behalf of the people and the country. They should have had a strong sense of responsibility toward both. But the reality is that most SOEs have not become stronger and richer given the tiny share of the profits they hand in to the State, since some of their leaders are more concerned with their own pockets.

What they have done has reduced them to not even qualify as citizens, and they deserve severe penalties for their corrupt actions according to the law.

Of course, the lack of an effective supervision mechanism over SOEs is also to blame. Obviously there are gaps in the system that need to be plugged. The fence mending cannot be delayed until it is too late.