Audit office finds flaws at 13 big state firms
Construction Bank and China Mobile among those with accounting and management woes
China Mobile, China Construction Bank, Agricultural Bank of China and 10 other big state-owned firms have been accused by the National Audit Office of various management and accounting irregularities and failure to implement government policies.
The audit office yesterday published on its website the audit reports on the 13 firms' financial results for 2011, highlighting the problems it found in them.
In addition, the company's branches in Guangdong and Hebei provinces and two research units bought more than 450 million yuan of commercial life insurance for their employees, which was not allowed.
The report also said the company especially arranged for its Hong Kong-listed unit to operate "profitable" investment projects since 2005, while it took over loss-making projects.
Construction Bank and Agricultural Bank were found to have failed to follow internal rules and processes when granting credits to enterprises and investment projects. Such loans totalled 6.8 billion yuan and 9.8 billion yuan, respectively.
Construction Bank was also criticised for providing letters of credit and bills of exchange for fake deals at some of its branches, while Agricultural Bank was faulted for illegally raising the deposit interest rate in 2011 in some places. The other firms named in the audit office's report were China Guodian, China Huaneng, Export-Import Bank of China, China Publishing, Commercial Aircraft Corp of China, State Development & Investment, China Minmetals, State Nuclear Power Technology, China National Aviation, and China Grain Reserves.
The 13 firms said they had taken action to rectify the issues, including strict measures to enhance internal inspections and risk control.
"The problems identified in this audit have already been rectified and the relevant responsible persons dealt with in a serious manner," China Mobile said.