Graft-busters tar­get state-owned firms ahead of re­form

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

China's anti-cor­rup­tion watch­dog has stepped up in­spec­tions of state-run con­glom­er­ates, fo­cus­ing on strate­gic firms, as Beijing pre­pares to im­ple­ment its most am­bi­tious re­form of gov­ern­ment in­dus­try in nearly two decades.

Anti-graft in­spec­tors are tar­get­ing 53 strate­gic cen­tral gov­ern­ment-owned groups, where top ex­ec­u­tives hold the rank of deputy gov­ern­ment min­is­ters, a state in­dus­try source fa­mil­iar with the mat­ter told Reuters. Chi­nese Pres­i­dent Xi Jin­ping has warned that the prob­lem of of­fi­cial graft is se­ri­ous enough to threaten the Com­mu­nist Party's le­git­i­macy and has vowed to go after pow­er­ful "tigers" as well as lowly "flies".

Graft-busters have gone after business lead­ers and politi­cians alike. On Fri­day, one of the coun­try's top spy chiefs be­came the lat­est of­fi­cial to be caught in the drag­net, sig­nal­ing that the bold­est crack­down on cor­rup­tion in decades had spilled over into China's pow­er­ful in­tel­li­gence ap­pa­ra­tus. The Cen­tral Com­mis­sion for Dis­ci­pline In­spec­tion (CCDI), the rul­ing Com­mu­nist Party's top anti-cor­rup­tion body, said it would in­spect all cen­tral gov­ern­ment sta­te­owned en­ter­prises (SOEs) this year, the of­fi­cial Xin­hua News Agency re­ported on Wed­nes­day.

In Novem­ber, the CCDI an­nounced it had dis­patched teams to eight big SOEs, in­clud­ing China South­ern Air­lines Co (600029.SS), China Unicom (0762.HK), Dongfeng Mo­tor Corp (0489.HK) and China Pe­tro­leum & Chem­i­cal Corp, or Sinopec (600028.SS).

On Fri­day, the anti-graft body said it would pros­e­cute Zong Xin­hua, the for­mer head of China Unicom's e-com­merce and in­for­ma­tion tech­nol­ogy unit.

China South­ern Chief Fi­nan­cial Of­fi­cer Xu Jiebo along with three other top ex­ec­u­tives at the car­rier were put un­der in­ves­ti­ga­tion and sacked for sus­pected crim­i­nal wrong­do­ing ear­lier this month.

The SOE anti-graft ef­forts coin­cide with China's im­mi­nent roll-out of am­bi­tious new guide­lines to over­haul the coun­try's in­ef­fi­cient state sec­tor. The State-owned As­sets Su­per­vi­sion

Ad­min­is­tra­tion Com­mis­sion

and (SASAC), the min­istry-level body that di­rectly over­sees 112 cen­tral gov­ern­ment in­dus­trial and ser­vice con­glom­er­ates, is ex­pected to publish the re­form plans be­fore the end of March.

"Cur­rently the anti-cor­rup­tion fight at cen­tral SOEs re­mains se­vere and com­pli­cated," SASAC Chair­man Zhang Yi said at an in­ter­nal meet­ing last year, ac­cord­ing to a post on the CCDI's web­site ear­lier this month.

The SASAC needs to be the "eyes" of the Party and stand in the "van­guard" to curb the spread of cor­rup­tion, Zhang said.

On Tues­day, Xi told a meet­ing of anti­graft au­thor­i­ties that they must step-up su­per­vi­sion, in­spec­tion and au­dits of sta­te­owned en­ter­prises and strengthen the Party's con­trol over those firms.

"State-owned as­sets and re­sources are hard-earned, the shared wealth of the peo­ple of this coun­try," Xi said, ac­cord­ing to the of­fi­cial Peo­ple's Daily. "We must com­plete the state as­set su­per­vi­sion sys­tem to toughen over­sight of de­part­ments and po­si­tions that are rich with power, cap­i­tal and re­sources," he said.

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