For corporate chiefs and market regulators in China, there is a lesson to be learned from the case of disgraced China Aviation Oil (CAO) CEO Chen Jiulin. Business integrity is no second fiddle to business results, and well-intentioned ends can never justify crooked means.

Last week, a Singaporean court sentenced the ambitious and once high-flying entrepreneur to four years and three months in jail for his role in a scandal that almost wrecked the company. The CAO saga flared up more than a year ago when the jet fuel trader's huge US$550 million option loss came to light. CAO is a Singapore-listed subsidiary of the State-owned China Aviation Oil Holding Company.

A remorseful Chen later told the media that he had not intended his company to end up in such a financial debacle; rather he wanted to make it an international success and serve the shareholders in the best possible way.

The nature of the means he employed to achieve those ends can be gauged from the charges pressed against him: making false and misleading statements, conspiring to cheat, and insider trading.

Unlike a standard Chinese court, which could have accentuated the end results the hefty losses that his unscrupulous acts had caused "the State, the people and the investors" the Singaporean judge underlined the damage he had inflicted on the rules of the game. The judge berated Chen for persistently engaging in elaborate and illegal practices to circumvent Singapore's corporate laws and regulations.

Chen's fall from grace hardly came as a surprise, given that corporate chiefs in China are often judged more on the results they deliver than the way they are delivered. It has become corporate culture for business leaders to bend the rules to achieve desirable outcomes.

The situation is compounded by market regulators of some local governments condoning unethical conduct by corporate chiefs in the false hope that they could help push the local GDP figures high enough to impress higher authorities. Or, as officials sometimes claim, to improve the lives of local people.

Guiding their actions is the philosophy that integrity in business plays second fiddle to results, and the end justifies the means.

But the truth is that business thrives on integrity, and the end justifies the means only when both are justified.

The key distinguishing quality of a successful business should be integrity. Without integrity at the top of the company ladder, as seen in CAO's case, a business is usually short-lived.

Integrity should be at the core of a healthy corporate culture, and could mean the difference between a company that succeeds and a company that falters.

Business integrity begins with compliance with market rules and ends with the nurturing of a competitive market in which integrity is rewarded and unethical practices penalized.

In a global marketplace that is getting smaller by the day, choice of goods and services abounds for consumers. They will not go for companies that display any less than the highest level of integrity.

As for a government aspiring to make life better for its people, the best way to do is by committing itself to fostering and upholding a level playing field for all businesses.

Corporate chiefs and market regulators need to keep reminding themselves an unscrupulous act can never serve a good end.

Email: zouhr@chinadaily.com.hk

(China Daily 03/31/2006 page4)