Supervision tighter on central SOEs' investment
Updated: 2007-08-02 11:13
The State-owned Assets Supervision and Administration Commission (SASAC) said in a statement yesterday that central State-owned companies (SOEs) should report investments in a timely fashion. This includes their major overseas investments and investments in real estate, securities, and insurance, the China Business News reported today.
The move is aimed at limiting investment risks, the statement said.
According to the statement, companies caught ignoring the order will be blacklisted, and the executives responsible will be punished.
SASAC also told central SOEs to provide timely reports on capital spending in non-core businesses.
The China Banking Regulatory Commission announced on June 18 that two SOEs, China Nuclear Engineering and Construction (Group) Corporation and the China Shipping (Group) Company, misappropriated 4.46 billion yuan (US$589.95 million) in bank loans to invest in the equity market and real estate projects.
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Companies were instructed to improve their risk management and maintain reasonable debt levels.
According to a management measure issued by SASAC in August 2006, central SOEs should concentrate on their core businesses and allocate no more than 10 percent of their total investment in areas outside key activities.
Li Rongrong, head of SASAC, stressed at the end of last year that central SOEs' investments in non-core business must be approved by his administration.
Currently, a total of 12 central SOEs are allowed operations in the real estate business, including China Overseas Property and Poly Real Estate Group Co Ltd.
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