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Watchdog pledges tighter scrutiny on SOEs
2010-Jan-7 20:36:18

BEIJING: China's discipline and government watchdog Thursday pledged to tighten supervision on state-owned enterprises and fight corruption among their executives.

"We will push hard investigations into and punishment of corruption in the restructuring, merger, property transactions, capital operations and construction projects of state-owned enterprises," said Vice Minister of Supervision Qu Wanxiang at a meeting in Beijing.

The watchdog would focus on cases involving executives and employees in senior positions, said Qu, also a member of the Standing Committee of the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI).

Severe measures would be taken to curb commercial bribery and the illegal practice of setting up "small coffers," referring to funds, securities and assets that should, but frequently are not, listed in account books in a bid to escape supervision.

The inspectors would also target malpractice that harmed common employees' legal rights and interests in the restructuring of state-owned enterprises, Qu said.

Last year, China saw a string of serious corruption cases in state-owned enterprises.

According to a report Tuesday by Faren Magazine, affiliated to the Legal Daily and overseen by the Ministry of Justice, 35 senior executives of China's large state-owned enterprises (SOE) faced corruption charges last year.

Among them was Kang Rixin, general manager of the China National Nuclear Corporation (CNNC), who has been under investigation for alleged grave violations of discipline since August.

Another prominent case involved Chen Tonghai, former general manager of China Petrochemical Corporation, who was found to have taken almost 200 million yuan in bribes and given a death sentence with a two-year reprieve in July.

"Efforts should be made to incorporate corruption prevention in enterprise governance and risk control systems," Qu said.

The government should further reform SOEs to help build sound corporate governance with proper decision-making, operations and supervision, he said.

Over the past three decades, China has been trying to introduce a modern corporate management in its state-owned enterprises, but faced problems with a lack of supervision and restricting the authority of managers.

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