China probes more than 2,200 officials for fraud

BEIJING - The Chinese authorities have investigated more than 2,200 government officials for involvement in major fiscal fraud, the country's top auditor said yesterday.

Briefing lawmakers on the audit of the central government's 2014 budget, Mr Liu Jiayi, head of the National Audit Office (NAO), said the majority of violations took place in sectors involving public funds, state assets and state-owned resources, such as land and mining.

Auditors found that over 780 billion yuan (S$170 billion) that had originally been earmarked for land transfers, aimed to help farmers gain more control over their land, was misappropriated by officials.

Officials who had profited from privileged information concerning state-owned resources were also singled out.

Mr Liu cited the case of former China Southern Power Grid deputy general manager Xiao Peng, who was charged with committing "duty-related crimes" earlier this year.

He apparently gave insider information to a relative, helping his stock investment grow by 50 per cent annually for eight consecutive years.

The NAO also released a statement on its website yesterday, stating that fourteen state-owned companies, including State Grid, Cosco Group and China Southern Power Grid, falsified 29.8 billion yuan in revenue and 19.4 billion yuan in profits.

Inadequate due diligence and violations in decision-making procedures also cost the firms 35.4 billion yuan in "losses or idle assets", the auditor said.

The statement said four billion yuan had been recouped from the state-owned companies and more than 250 people had been penalised. The audit office handed over 56 serious cases to the "relevant departments", it said.

Violations were also found in the nation's financial industry, the audit office said. Loans amounting to 16.8 billion yuan from Bank of Communications, China Development Bank and China Export & Credit Insurance were found to have violated rules.

China Development Bank, a policy lender, broke rules on 13 billion yuan of loans it had disbursed since 2005, while Bank of Communications, China's fifth-largest lender by market capitalisation, gave out 3.8 billion yuan of loans to unqualified projects and companies between 2008 and last year, the auditor said.

BLOOMBERG, XINHUA

A version of this article appeared in the print edition of The Straits Times on June 29, 2015, with the headline 'China probes more than 2,200 officials for fraud'. Print Edition | Subscribe