bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Elaine Chan

First round of new regulations to affect 150,000 medium to small-sized SOEs

China plans to  introduce regulations to curb illegal asset sales as part of efforts to reform moribund state companies.

The plans follow  heated  talks about growing fraud and corruption at state firms at the National People's Congress (NPC) which yesterday closed with Premier  Wen Jiabao reiterating the need to improve corporate governance.

The first set of regulations will define the size of stake a company's management is allowed to hold.  The new rule will affect about  150,000 medium to small sized state-owned enterprises (SOE), according to  media reports.

Managers will also be banned from buying out assets or using acquired assets  as collateral to raise funds or secure loans.

State asset losses have become a worry for the central government as  investigators have uncovered an increasing number of thefts by SOE bosses in  recent years.

Procurator-General Jia Chunwang said in his NPC report  last week that 10,407 officials were found to have misappropriated or stolen state assets during  restructuring programmes last year.

The Bank of China and China Construction Bank are investigating thefts of more than one billion yuan  by branch officials in the northeastern provinces.

Rules to govern state asset sales are  needed as  Beijing quickens the pace of privatisation. The State-owned Assets Supervision and Administration Commission (Sasac), which controls more than 180 of the country's biggest SOEs with assets worth 9.2 trillion yuan, aims at cutting  the number of companies under its control to between 80 and 100, although the eventual goal is to groom 30 to 50 internationally competitive corporations.

In a recent interview with China Central Television, Sasac chairman  Li Rongrong conceded that China had not been able to  prevent asset losses due to  the lack of a comprehensive legal framework.

Mr Li said a key issue  was being able to hold local state-assets bureaus responsible at provincial and city levels.

But  delegates to the Chinese People's Political Consultative Conference were critical of Sasac, although it was  noted that the  organisation had only been in existence for  less than two years.

'No one person  is able to reform all industries and know every one of them, be it civil aviation, telecoms etc,' said  Liu Deshu, president of Sinochem, a Sasac-controlled state giant. 'I don't see any new measures in enterprise reforms.'



Beijing plans clampdown on illegal sales of state assets