State Grid Corporation chairman Liu Zhenya targeted in massive audit
The nation's largest electricity grid operator, the State Grid Corporation of China, has been told to prepare 1,000 workspaces for state inspectors to conduct an accountability audit of the company's chairman, Liu Zhenya, a source said yesterday.
It will be one of the largest such audits ever carried out of a state-owned enterprise and will last at least until October, a person close to the National Audit Office said yesterday.
The audit office and other authorities had previously received letters alleging financial problems and accusing the power company's management of potential corruption.
State media including the website of People's Daily said five audit teams had been sent to the company, without giving details of the audit. The corporation's public relations officers could not be reached for comment yesterday, which was a public holiday.
The source, who did not want to be named, said that although there was no tip-off directly targeting Liu, 61, the authorities had received complaints suggesting he was indirectly responsible for alleged problems and the audit would focus on accounts kept during his time as general manager. It may go back to 2004, when Liu took up the position.
The audit may also be widened to include overseas assets, as well as some private companies contracted by the power firm for outsourced projects in Shandong province, according to sources close to the audit office and the company.
Under the Audit Law, accountability audits are different from regular audits. All heads of central-level state-owned enterprises are supposed to be audited every several years.
The main purpose is to investigate the person's "economic responsibility" - a term covering a wide range of managerial roles - during his tenure.
The results of the investigation can be referred to in later evaluations by discipline inspection authorities and the personnel organisation department.
State Grid audit starts at research division
Government auditors have started their massive review of the State Grid Corporation of China, the nation's leading electricity supplier, with a look at its research arm, a source and state media said yesterday.
The division, the China Electric Power Research Institute, provides scientific support for ultra-high voltage (UHV) power transmission.
State Grid used UHV technology in a 100-billion yuan project to extend electricity transmission from the mainland's interior to its coastal provinces in 2006.
An audit of the project conducted last year found irregularities but did not release details, the source said.
The website of party mouthpiece People's Daily also said auditors would first look at the research institute.
The focus of scrutiny is the company's chairman, Liu Zhenya, who joined the utility in 2000. Liu has pushed for a national grid that allows for transmission at high voltages.
He has written extensively about the technology, saying it will drive a third industrial revolution and cut air pollution.
In January, the utility spent HK$10 billion on an 18 per cent stake in the Li Ka-shing-backed HK Electric Investments.
By the end of 2012, State Grid's transmission network extended across nearly 90 per cent of the mainland, providing electricity to 1.1 billion people. It ranks seventh on the Fortune 500 list.
The firm hopes to raise capital through a bond issuance in Hong Kong as early as this month, people close to the company said.