Sasac plans probe of state firms' big investments

Risk exposure and losses a concern

The state assets watchdog will launch a nationwide probe of big investments and acquisitions by state-owned enterprises amid concern the global financial crisis will expose the companies to big losses.

The investigation by the State-owned Assets Supervision and Administration Commission (Sasac) will focus on the capital risk exposure of the companies to unveil hidden risks before substantial losses occur, Xinhua reported.

The finance operating units of state firms, a conduit for most capital raising and investments and which are usually beyond the regulator's oversight, will be a key area of interest, according to Xinhua.

The move by Sasac comes after enterprises controlled by the central government reported a profit slump for the first time in six years, while several state-owned firms booked losses on their overseas investments.

'The examination will be headed by Sasac's disciplinary department and target big companies that incurred significant losses last year under the impact of the world financial ups and downs,' a Sasac official said.

'The declining performance of the central-government-owned companies is due to changes in government policies, the global financial crisis and the low and substandard management level of those companies,' Sasac deputy director Meng Jianmin was quoted as saying by Xinhua.