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China auditor uncovers 200b yuan in fake revenue at state firms

China’s government auditor said in its 2016 report published today that 18 of 20 central state firms it audited had inflated revenue by 200 billion yuan (RM125.4 billion) and profits by 20.3 billion yuan in recent years. — Reuters picBEIJING, June 23 — China’s government auditor said in its 2016 report published today that 18 of 20 central state firms it audited had inflated revenue by 200 billion yuan (RM125.4 billion) and profits by 20.3 billion yuan in recent years.

The companies audited include China National Petroleum Corporation, China Huaneng Group and Sinochem Group.

The report from the National Audit Office also said that due to inadequate risk control measures, the 20 centrally-administered firms had put overseas investments worth 38.5 billion yuan at risk.

In an effort to rein in financial risks, the government has stepped up scrutiny of investments by state firms and is increasing oversight of the risks in local government debt.

Debt of some local governments has risen quickly, with some also illegally raising debt, the audit office said.

Government-backed debt in regions audited saw outstanding debt rise 87 per cent from June 2013 to March this year, the office said.

The state auditor also said some banks violated rules in their loan and asset management operations, including insufficient disclosure of information about non-performing assets.

Also today, the finance and economy committee of the National People’s Congress said in a report the government must be vigilant against risks in local government debt. — Reuters