China has
sacked 31 senior executives in state-run enterprises, including 20 chief
executives, due chiefly to losses and corruption, the Beijing News reports,
citing incomplete statistics on the anti-graft campaign in 2013.
Of the 31,
eight senior executives were sacked due to their enterprises making losses.
China COSCO Holdings, for example, which reported the biggest two-year
(2011-2012) loss of any Chinese listed firms with 20 billion yuan (US$3.3
billion), announced on Nov. 7 that its executive director Xu Minjie was being
investigated. China Shipping Development Company lost 1.2 billion yuan (US$198
million) in the first three quarters of 2013, while China Shipping Container
Lines lost 1.7 billion yuan (US$281 million), resulting in senior executives
from both companies being investigated and subsequently removed from their
posts.
About 10 of
the 31 executives were mostly likely sacked because of corruption during
procurement, including Sun Lian, general manager of the program planning
division of Guangdong Mobile, and Xu Long, chairman and general manager of
China Mobile Guangdong, the report said. Wang Yongchun, vice president of China
National Petroleum Corp (CNPC) and general manager of Daqing Oilfield Company,
was investigated for suspected discipline violations — often used as a byword
for corruption in the state-run media — according to the Central Commission for
Discipline Inspection (CCDI) of the Communist Party of China and was
subsequently sacked on Aug. 26. Wang was among six CNPC officials to be sacked
in 2013, the most in any state-run enterprises. Eleven of the 31 executives
came from state-run enterprises in the oil and telecom fields, which have
monopolies in China.
Zhao Xiao,
professor at the School of Economics and Management at the University of
Science and Technology Beijing, said many senior executives of state-run
enterprises have faced great temptation to engage in corrupt practices after
the government injected huge funds into state enterprises in a bid to boost the
slowing economy dampened by the global financial crisis in 2008.
Without a
proper supervisory mechanism, it is the state-run enterprises with monopolies
that are most likely to engage in corrupt practices, Zhao said.
Zhu Poshan,
an expert on the restructuring of state-owned enterprises, said the current
supervisory system allows administrators to be managers at the same time, thus
providing more channels for corruption than normal government officials.
In many
state-owned enterprises, in order to facilitate decision-making, the roles of
chairman and party secretary are frequently occupied by the same person, and in
some enterprises the chairman, president and party secretary are all the one
person, leading to a lack of proper supervision within the company. Under such
circumstances, the supervision of the company operations can only be achieved
with an external audit and outside supervision, the report said.
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