SOE Audit Finds Three Problems: Investment Deficit, Excessive Benefits and Low Profits

In the article below, "spamming" should be read as "excessive."

审计曝央企3大顽疾：投资亏损滥发福利少报利润

Assuming a spamming employee benefits, employee violations profitable investment holdings, configure Bus excessive, illegal construction of golf courses, and more costs of underreporting profits, resulting in huge loss ...... blind investment Audit 20 release 11 central enterprises 2012 annual financial income branch audit results announcement, the central enterprises broke a series of problems in accounting and financial management, the implementation of national economic policies and major business decisions, internal management, and some managers also suspected violations of law.

Spamming several hundred million dollars hidden benefits

Audit report shows that 11 central enterprises were irregularities payment of workers welfare. The main means of payment of benefits, including violations, falsifying expense or clever stand PPE, fitness nominal fees for their employees bonuses or gift cards. If CASIC Henan Aerospace Corporation under the use of false invoices taking three million yuan, of which 1.411 million yuan for middle leaders to issue a "key work to complete the assessment Award", the boat industry taking 4,215,400 yuan for the purchase of consumer cards, CRH falsifying materials fee taking 8.54 million yuan shopping card issued to employees.

Some companies pay for workers exceeded the fund. Tobacco Corporation has been blasting 38 subordinate enterprises exceeded pay housing fund and is charged in addition to the total wage expenditure on wages up to 256 million yuan, the company said it has now recovered or the cost of repaying the violation. It belongs in Hunan tobacco workers in 2008 to advance the funds to buy housing project to be audited are not out there to recover 102 million yuan, Tobacco Corporation has recovered 030 million yuan to respond, the remaining amount is still in the collection.

Some companies also "little treasuries", such as Datang Group companies falsifying dispatch labor taking 2.114 million yuan to set up "small treasuries" leading cadres for the bonus.

PetroChina , Datang Group, National Tobacco Corporation and a number of central enterprises involved in illegal ESOP investment affiliates make a profit. PetroChina under two ESOP companies or affiliates, and the fat profit 30.3273 million yuan for employee benefits. Datang Group, a subsidiary of listed company Datang International violations lets ESOP shares interbank business to make a profit quality generation assets 160 million yuan. Datang Group indicates repaying the ESOP and instructed to make a profound examination of Datang International Party.

Director of the Academy of Social Sciences Liu Yingqiu China Private Economy Research Center, said the behavior of these pretexts spamming benefits, collective property of a few people will benefit, is the erosion of state assets, tax evasion, illegal trade of socialist public ownership of the "corrosive." The reason is the central administrative monopoly enterprises occupy more resources and easier access to national care policy and bank loans due and should be punished.

Underreporting profits investment losses

Audit showed that 11 central enterprises exist in the financial statements are not standardized, resulting in costs of more than underreporting profits problems to varying degrees. As CNPC understated profits 603 million yuan, Datang Group accrued income 2.598 billion yuan and more, and more costs of 2.604 billion yuan, resulting in less total profit of 006 million yuan. The group said in a corrective notice in the financial statements have been adjusted and further standardize accounting management.

Tax evasion is also the problem of the existence of these central enterprises. Soldiers loaded the Group is subject to the audit of the 2012 business tax 3,870,700 yuan young, urban construction tax and education surcharge 464,500 yuan. The group represents 4.3352 million yuan of tax has been turned over to the state treasury. Audit Commission said that these companies were to pay the various taxes 178 million yuan.

Overseas blind investment resulted in a loss, poor exposed part of the central enterprises management, risk control awareness is weak. Nuclear Construction Group was audited without the presence of the two foreign collective research project decisions, not evaluated under the profit and loss of overseas branches, overseas branches for payment of debts contractor compensation expense and other management issues are not standardized, involving an amount of 51,311,800 yuan. The group said the project has been developed to enhance overseas, overseas investment management of specific programs, the project will strengthen risk management and control outside.

Domestic operations, the presence before construction is approved, illegal investment, a number of issues such as illegal tender central enterprises. PetroChina under 9 units failing to tender involving 26.035 billion yuan. Duolun Coal Chemical Project Datang Group's investment budget for the actual investment of over 6.179 billion yuan, the project fell short of expectations index extension after commissioning and procurement of raw materials exist idle expired resulting in increased costs and other issues. The group said it is relevant formalities, improve relevant systems, reduce economic losses, improve capital efficiency.

For the central enterprises and investment accounts in violation, Liu Yingqiu that this is not only a central enterprise operators own problems, the problem is also the state-owned assets supervision and administration departments, law enforcement agencies, the core institutional mechanism is not perfect, oversight.

Audit recoup their losses of nearly 3.3 billion yuan rectification required cure

Audit relevant responsible person said, 11 central enterprises attach great importance to the audit findings and corrective basically completed. As of the end of May, the relevant enterprises to develop sound rules and regulations 1194, responsible for 190 people were dealt with severely, including 32 bureau-level cadres, and had to restore and prevent loss of 3.296 billion yuan. SASAC statement the same day, will urge the relevant enterprises to seriously implement the rectification and seek a permanent cure.

Liu Yingqiu said the audit results reflect only part of the problem state-owned enterprises, state-owned SOEs current complexity of the problem comprehensively deepen reform is imminent. He believes that countries in recent years gradually improve SOE dividends paid in 2020 and demanded the proportion increased to 30%, passing out breaking the state capital "intimate circle" reform signals, SOEs should come up with more profits return to the community instead of "pocketed."

Lee Kum China Enterprise Institute chief researcher believes that SOE problem repeated investigations repeat offenders, the core problem of the absence of mechanisms and monitoring systems. He proposed to break the long-established state-owned insiders control system, reform of the cadre appointment system and increase transparency, greater reliance on external audit, and strengthen investor regulatory mechanism.