Tighter corporate governance norms for SOEs on cards
Updated: 2015-05-06 07:26
By Li Xiang(China Daily)
|
|||||||||
The risk of potential malpractice in the management of overseas assets owned by State-owned enterprises remains unacceptably strong, the country's anti-graft authority has revealed.
The Central Commission for Disciplinary Inspection has released the results of an investigation into some of the country's biggest SOEs, including those in the energy, transportation, aviation and telecommunications sectors.
The results have under-lined the central government's intention to introduce tougher levels of corporate governance and more effective management of overseas interests.
Experts said the tightened level of scrutiny highlights Beijing's intention to ensure the smooth launch of its ambitious "Belt and Road Initiative"-the strategy to revive the ancient Silk Road and the maritime Silk Road, which will lead to greater number of overseas projects conducted by the SOEs.
"This action to target potential overseas malpractices by State companies illustrates the government's determination to address existing problems and to create favorable conditions to roll out the Belt and Road strategy," said Xu Baoli, director of the research center at the State-owned Assets Supervision and Administration Commission.
Total assets held by SOEs in overseas markets are now worth an estimated 4.7 trillion yuan ($760 billion), but experts have long considered effective supervision of the operations and investments as a vulnerable part of Beijing's overall regulation of the sector.
Dong Dasheng, a former national deputy auditor-in-chief, said in March that virtually no audit had been carried out on the country's overseas assets controlled by SOEs.
To address the issue, the nation's State asset regulator last month appointed seven independent third-party auditing firms through tender, to conduct a comprehensive review of the portfolio.
The move is being linked to Beijing's ongoing anti-corruption campaign, which has already led to the down-fall of a string of senior SOE executives.
It has been confirmed that 19 top SOE executives are under investigation for corruption after the country's anti-graft watchdog completed its first round of inspections into 26 SOEs between late February and the end of April.
Li Jin, vice-president of the China Enterprise Reform and Development Society, said too many loopholes still existed that could lead to corruption or abuse of power in the overseas management of SOEs, and that it was now essential to set up an effective auditing and verification mechanism to prevent the loss of State assets.
Some experts have suggested that the introduction of public-private partner-ships in the SOE sector could help prevent corruption, as the investment model would create internal checks and balances on the power of the top executives.
"Corruption is always associated with power," said Xu.
"The fundamental solution is to improve the corporate governance of SOEs and break the power monopoly by setting up effective mechanisms, such as the introduction of boards of directors."
- Anti-graft drive may prompt SOEs to be prudent
- China's SOEs to be under public scrutiny
- Securities companies may come under the anti-corruption radar
- Anti-corruption campaign will boost economy
- Adopting a patient approach in anti-corruption will pay dividends
- SOE inspections uncover more graft, accelerating reform
- China joins rehearsal for Victory Day parade in Moscow
- Man impresses with home-made excavator
- Blossoms a boon for tourism
- Camel caravan on the Silk Road
- Met Museum celebrates China with annual gala
- Ten photos you don't wanna miss - May 5
- Tree house hotel in Jinan
- Six reasons stopping Apple Watch from ticking in China
Most Viewed
Editor's Picks
What do we know about AIIB |
Full coverage of Boao Forum for Asia |
Annual legislative and political advisory sessions |
Spring Festival trends reflect a changing China |
Patent applications lead the world |
BC lures Chinese tourists |
Today's Top News
Metgala draws Chinese fashion bloggers' criticism
US authorizes ferry service to Cuba
China Daily's website takes top spot in readership
Xi will honor soldiers during Russia trip
China reforms can benefit
US: experts
Shanghai bans families of govt officials from owning firms
Chinese companies demonstrate presence at OTC
Most Americans believe US wealth distribution unfair: poll
US Weekly
Geared to go |
The place to be |