Others News
- Auditors uncover law violations in financial institutions
Date: 9-Jan-2007 Sources: (Xinhua Online)
China's auditing authorities had been keeping a close watch on malpractice in the country's financial institutions in the just past 2006.
Fifty-five people were involved in 37 illegal activities at the Bank of China, the Bank of Communications and the China Merchants Bank, Li Jinhua, auditor-general of the National Audit Office (CNAO), said on Monday.
Li did not reveal how much money was involved in the illegal activities.
The three banks have all 'made considerable progress in establishing modern corporate systems' but management loopholes still exist, said Li, citing a few hidden troubles in some branches of the three banks, including rising non-perform loans and high risk loans for road building.
The National Audit Office launched a nationwide audit campaign on 1,114 state-owned and state-controlled financial institutions in 2006. Their complete audit report is not yet available.
Auditors in Hebei, Shanxi, Henan, Guangdong, Xinjiang and Sichuan audited a large number of rural credit cooperatives, securities dealers and commercial banks last year.
Three financial institutions in Guangdong Province were found to have misused a total of 300 million yuan (38.5 million U.S. dollars) and mismanaging a total of 200 million yuan.
When auditing 500 rural credit cooperatives, local auditing authorities in Shanxi Province found falsely-reported profits and losses, widespread non-performing loans and wrongful lending.
The audit campaign aimed to crack down on illegal activities in financial institutions, help them 'guard against risks, standardize management and raise benefits' and ensure the country's macro-economic control policies are implemented, said Li.
Li said another audit campaign will be launched by the CNAO to examine the assets and liabilities of the National Development Bank, the Agricultural Bank of China, the China Everbright Bank, PICC Property and Casualty Co. Ltd. and China Reinsurance Co.
Meanwhile, the CNAO will investigate the disposal of non-performing assets by the country's four asset management companies - Huarong, Cinda, Great Wall and Orient - in order to prevent losses of state assets.
The auditing of 6,997 state-owned enterprises in 2006 discovered evidence of 14 illegal activities, involving one billion yuan and 57 people.
Local audit authorities investigated 1,324 company executives. It ferreted out illegal activities involving 910 million yuan and handed over 22 people to judicial departments.
The auditors also audited 34,000 government and Communist Party officials, leading to the discovery of five billion yuan in misused funds, and the handover 116 suspects to judicial departments.
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