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Calls for law to curb losses in SOE assets With hemorrhages of State assets causing growing public concern, a National People's Congress (NPC) deputy has called for legislation on full information disclosure by State-owned enterprises (SOE) to fight corruption. Ma Weihua, president of China Merchants Bank, made the proposal at the ongoing session of the NPC. Ma said that SOE reforms over the past two decades have effectively revived SOEs. But in the meantime, the State loosened its supervision of many enterprises, leading to problems such as selling State assets at low prices, insiders' controlling them and increasing bad-loans at banks. Without a law in place, it is too difficult for the State-owned Assets Supervision and Administration Commission (SASAC) to supervise the 181 key State firms with assets that amount to nearly 9.2 trillion yuan (US$1.1 trillion). A SASAC inspection of such firms last year found that 40 firms suffered a 10 per cent loss in total assets, while another 40 reported 20 per cent losses. Many were discovered to have problems in their accounting practices and financial reports. A law to require SOEs to disclose information in a timely and correct manner will place activities of SOEs and their high-level managerial leaders under the supervision of employees and the public. This will help uncover and prevent non-standard activities and corruption, provide more accountability to people found to be faking accounts and weaken insider control. Ma said that SOEs are owned by the public, which means the public has a right to receive timely information about such enterprises. According to Ma, the law should require SOEs to disclose information through the media and their own websites. Detailed information should be provided to their employees. Heads of SOEs and accounting firms auditing the enterprises' financial statements should hold managers accountable as to the reports' authenticity, timeliness and accuracy. SOEs releasing inaccurate information or failing to disclose information in a timely manner should be fined by the SASAC, while responsible persons should face criminal charges, the deputy suggested. (China Daily 03/10/2005 page3) |
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