According to an investigation by the Supreme People's Court,
from 2003 to August of 2004, procuratorial bodies nationwide
prosecuted 25,322 officials from state-owned enterprises (SOEs) for
crimes involving the abuse of their position during
restructuring.
These crimes resulted in a huge drain of state assets, and
accounted for 41.5 percent of all graft and corruption cases
investigated and dealt with by the Supreme People's Court. Cases
related to the restructuring of SOEs also proved to be the most
aggressive and avaricious.
Beijing procuratorial bodies said there have been four increases
in position-related crimes during restructuring: a rise in the
number of cases from 169 five years ago to 242 in 2002; a rise in
the number of SOE first-in-commands committing them; a rise in the
number of cases involving over 1 million yuan; and an increase in
total losses from under 100 million yuan (US$12 million)?five
years ago to 470 million yuan (US$57 million)?in 2003.
During SOE restructuring, turning state property into one's own
has been considered the most effective and quickest way to amass a
fortune by some officials.
They have used various means: deliberately reducing and
concealing the amount of state assets by forging accounts and
certificates; illegally transferring state assets through shares
and stocks; awarding themselves bonuses; exploiting preferential
treatment granted by the state to employees of restructured
enterprises through black casework; and colluding with other SOE
officials.
Many SOE officials have taken advantage of instability and lack
of supervision during restructuring, and some deliberately siphoned
off high-quality assets, leaving bank debts and tax for the
enterprises to pay.
Much of the money illegally acquired has been used to make
investments, rather than simply for hoarding or consuming. The
crimes are becoming more sophisticated and international, making it
harder for procuratorial bodies to track them.
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Li Baomin, vice director of the Research Center at the State
Council's State-owned Assets Supervision and Administration
Commission, said that restructuring should be based on clear
definition of property rights. Transference of property rights
should involve employees to protect their interests instead of
providing opportunities for black casework by the management
team.
Experts propose standardization of procedures for the flow and
trade of state assets based on principles of openness,
transparency, orderliness and standardization. They say information
about SOE restructuring should be made public, and for those
enterprises in which state assets account for over 25 percent of
the total, they should report restructuring plans and property
transfers to state assets administration departments. Supervision
should also be strengthened.
Some also recommend amendments to state assets administration
and supervision laws and regulations, and that the role of
departments in charge of investigating asset-draining cases should
be clarified and strengthened.
(Xinhua News Agency, translated by Yuan Fang for China.org.cn,
January 2, 2005)