Beijing plans external audit of state firms' foreign assets

China’s top state-owned enterprises regulator is planning to invite independent accounting companies to carry out an audit of state firms’ overseas units in an unprecedented move amid concerns they provide fertile ground for corruption.

The State-owned Assets Supervision and Administration Commission (Sasac) said yesterday it would launch a bidding process for accounting firms interested in conducting the audit.

The bidders should not have conducted auditing services for SOEs and their overseas subsidiaries over the past three years.

Beijing has listed SOEs as this year's primary target in its anti-corruption campaign. The graft-busting agency, the Central Commission for Discipline Inspection, is expected to finish inspecting all major SOEs within the year. Since the last inspections in 2014, 14 SOE executives have been punished or detained.

The SOEs had accumulated overseas assets worth more than 4.3 trillion yuan (HK$5.4 trillion) by the end of 2013, but these had faced little scrutiny, state-run news agency Xinhua said. Many SOEs have expanded their overseas operations under the central government's "going out" strategy aimed at boosting China's connectivity with other regions.

Observers said that even though a number of agencies were involved in approving SOEs' overseas operations, the auditing of such assets remained weak, making them easy targets for corrupt officials.