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SOEs, chiefs face audit under new rules
By Sun Min (China Daily)
Updated: 2004-09-13 16:12

The State-owned Assets Supervision and Administration Commission (SASAC) on Friday released two regulations to examine and audit the operational results of the State-owned enterprises (SOEs) and the performance of the SOE chiefs.

The regulations, further clarifying the liabilities of SOE executives in management of the State assets, are aimed at looking after the maintenance and appreciation of these assets and the accuracy of relevant statistics.

They introduce the method of calculation for the evaluation of the State asset operation and enhance the relevant responsibility of the SOE executives, auditors and supervisors in the government agencies.

Both regulations were effective from August 30. One is the temporary regulation on the examination of the results of the State-owned assets maintenance and appreciation in enterprises.

It lists the major indices used for the assessment of the State assets operational results and sets the criteria for their performance.

Top executives of enterprises that fail to meet the target for the State assets management will have their salary cut according to relevant standards.

Those who provide fake or incomplete information in the corporate results will be punished. Accounting firms will also bear relevant liabilities.

Staff of the State asset supervisory bodies, including SASAC and local watchdogs, will also be punished if they cover up for the enterprises or make frauds during the result evaluation process and shoulder criminal liabilities if they commit crime.

The other regulation released on Friday watches over the auditing of top executives of the central SOEs and their economic liabilities during their term of service.

It is said that SASAC will organize regular auditing on the runners of the enterprises it supervises. Items to be audited include the truthfulness of the corporate results, the change in asset quality, management efficiency and the economic liabilities of the executives in major management decisions.

Those found guilty of irregularities or illegal activities during the management of the enterprises will face liabilities according to existing laws and regulations.

SASAC will authorize State auditing agencies or auditing firms to conduct the work. The rule lists the criteria for the agencies, including sufficient asset scale and a clean record for the past three years.

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