Big Chinese SOEs falsified revenues
China's state auditor has uncovered falsified revenues and profits in the accounts of some of the country's biggest state-owned companies, as Beijing broadens its assault on official corruption.
The National Audit Office said on Sunday that 14 state-owned groups, including well-known names such as State Grid, China Ocean Shipping (Cosco) and China Southern Power Grid, falsified nearly Rmb30 billion ($4.8 billion) in revenue and nearly Rmb20 billion in profits in 2013.
The revelations came in the auditor's annual work report summarizing the results of its reviews of government spending, as well as state-owned enterprises.
It follows audits last year that exposed problems at China Investment, the sovereign wealth fund, Bank of China, the fourth-largest lender, and Agricultural Development Bank, a policy lender.
The audit office's more aggressive stance towards state champions is part of a huge clampdown on corruption and misuse of public funds in areas ranging from mah-jong to top company executives, more than 100 of which have been detained on suspicion of corruption since the start of last year, according to official statistics.
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Last week, a separate agency, the Communist party's anti-graft watchdog, said it would probe China Railway, China Aluminum and People's Daily, the official party mouthpiece, in the latest round of inspections at state companies.
The state auditor blamed poor due diligence and decision-making procedures for wasting Rmb1.6 billion in resources and Rmb35 billion in "losses or idle assets". The auditor said Rmb4 billion had been recouped from the companies involved and 250 people penalized.
The audit office statement said 56 serious cases had been handed over to "relevant departments", probably a reference to prosecutors or the party's anti-corruption commission.
Loans worth Rmb17 billion from Bank of Communications, China Development Bank and China Export and Credit Insurance had violated rules, the auditor said.
China Development Bank, a non-commercial policy lender that supports infrastructure and foreign development loans, violated rules on Rmb13 billion in loans disbursed since 2005. Bank of Communications, China's fifth-largest by assets, gave out Rmb3.8 billion in loans to unqualified projects and companies between 2008 and 2014, the auditor said.
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Last week, the national auditor uncovered misappropriation of nearly Rmb17 billion in funds from the state lottery program. Funds were misappropriated through the buying and building of office buildings and hotels or embezzled, the National Audit Office said.
Irregularities accounted for a quarter of the total of lottery funds received in 2012-14, the audit office said.
The state-run sports and "social welfare" lotteries are the only legal form of gambling allowed in mainland China and on current rates of growth lottery ticket sales are expected to eclipse those in the US by the end of next year, making China the world's biggest lottery market.