Chinese state firm put clerks into high-power roles after government officials banned from boardrooms

  • Questions about hiring and qualifications of youthful board at SOE in Shandong suggest managers were caught out by sweeping business reforms
PUBLISHED : Thursday, 13 December, 2018, 5:17pm
UPDATED : Thursday, 13 December, 2018, 5:52pm

Local authorities in central China said on Wednesday the appointments of senior executives – some in their early 20s – to the board of a state-owned enterprise with more 10 billion yuan (US$1.46 billion) in assets were legal and above board.

The government of Linzi district in Zibo, Shandong province, said this week it would investigate the hiring of executives at the Public Assets Operation Company after disquiet about the ages and qualifications of the candidates.

A senior official from the district’s State-owned Assets Management Bureau, which owns the company, said on Thursday that the appointments of nine top executives – including chairman Zhang Haigang, board members and supervisory board members – were in line with regulations and that no relatives were involved in their hiring or employment, news portal Thepaper.cn reported.

Spotlight turns on high-flyers at US$29 million company

The official, whose name was not released in the report, said the change in the company’s management at the end of 2015 was the result of a 2013 order from the Central Organisation Department of the Communist Party that government officials were prohibited from holding a position in business. It has been put into effect across the country in the past few years.

This resulted in senior executives, most of whom were born in the 1960s or early 1970s, quitting the SOE and returning to work at government departments, said the official. Government jobs on the mainland are generally lifelong posts.

Members of the present team are aged between 26 and 34 and their monthly salaries were between 2,900 and 5,000 yuan (US$422 and US$728), said the report.

Zhang earned 3,388 yuan a month this year, the report said, while he was paid 1,300 yuan a month on joining the company as a finance project assistant in 2014. He worked as a clerk at an accounting firm for three years before being recruited by Public Assets.

One of the executives, Gong Qun, who has a master’s degree, earned 5,387 yuan each month, the highest paid member of the management team.

Beijing invites foreign firms to buy into state-owned enterprises

This week, media reports showed that two other executives, Guo Hongkun and Chen Mingyang, who were born in 1991 and 1992 respectively, were 24 and 23 years old when they joined the board.

Guo started working at the company as a project assistant in November of 2012 and joined the board three years later. Chen joined the company as a project assistant in July of 2015 and, four months later, he was appointed to the board.

“These executives are not that young after all. They have come to an age to shoulder responsibilities,” an unnamed official was quoted by Thepaper.cn as saying.

Last month, it emerged that an SOE in Xian, Shaanxi province, appointed three women – aged 34, 25 and 23 – as chairwoman and board members although they were formerly account clerks with no management experience.

China has no intention of reducing role of state-owned firms

It was understood that the former executives of the Xian company left the firm and made the clerks nominal holders of those positions to follow the central authority’s rule.