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Auditors reveal truth about State assets firms
Updated: 2005-01-22 03:06

Auditors found malpractice involving 6.7 billion yuan (US$810.16 million) at four State-owned assets management companies, the National Audit Office announced on Friday.

The offi ce uncovered 38 cases of illegal operations and problems in the Huarong, Orient, Cinda and Great Wall companies. Friday's edition of Beijing News reported that the Auditor-General, Li Jinhua, told a national meeting of government auditors early this month that the four companies had bought non-performing loans that had little chance of being repaid, to help disguise illegal operations.

Auditors also found back door dealings used to clear bad assets. For instance, the banks sold non-performing assets at a lower price than they should have, leading to a loss of State assets, Li said.

Some companies had committed fraud by reporting fake financial figures and misusing funds for employees' salaries and subsidies, he said.

The Chinese Government founded the four companies in 1999 to clear the bad assets that had been left by four State-owned commercial banks.

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