SOEs' sales must be transparent, urges watchdog SASAC

State-owned enterprises must improve the transparency of their asset sales, the mainland's state asset watchdog has said.

The State-owned Assets Supervision and Administration Commission also ordered them to offer private enterprises equal status in acquisitions.

The moves will not only help curb corruption in transactions involving state assets, but also give more impetus to ongoing SOE reforms, the watchdog declared in a recent notice.

The notice said central government-controlled SOEs and their subsidiaries must follow principles of openness, fairness and impartiality in selling assets exceeding a certain value, which was not specified, and conduct the transactions through legally-established trading institutions for property rights.

SOEs will also be required to establish a comprehensive management system for various kinds of assets, including equipment, real estate and intellectual property rights.

The notice also banned the 113 SOEs under central government control from imposing any limits on the qualifications of buyers of their property, unless there were specific requirements in relevant laws or regulations.

The mainland has issued several regulations requiring SOEs to conduct their asset transactions in an open manner in the past.

However, Liu Xiao, an analyst with Beijing-based Anbound Consulting, said: "There are still many loopholes in the system, and SASAC's latest move is showing they are trying to fix the problems.

"Some insiders have taken advantage of loopholes in the system to buy or sell state-owned properties at unreasonable prices, causing rampant corruption within the SOEs."

Mainland media reports show much of the corruption occurs in property transactions.

The National Business Daily reported that Changqing Oilfield, a subsidiary of China National Petroleum Corporation, sold many oil wells at very low prices to private investors without proper evaluation.

Four senior CNPC executives, including one who was head of Changqing, have been put under investigation.

Beijing has vowed to speed up reform of the SOEs by encouraging the development of mixed ownership, with private capital being invited to take shares in them.