In a recent inspection of 181 state companies' financial auditing reports, China found that 13 had lied and 120 had submitted incomplete financial reports, according to the State-owned Assets Supervision and Administration Commission (SASAC).

The SOE watchdog, which has signed performance contracts with 181 state companies, announced the results Sunday at an annual meeting of China's general accountants association.

Meng Jianmin, an official with the SASAC, said that among the 181 SOEs, 80 were found to have serious assets losses.

"The key trouble makers are those financial intermediaries," said Meng, "The 181 SOEs have hired more than 300 such institutions to operate their financial businesses, and a great proportion of these intermediaries are actually not acting on their duties, some are even helping the SOEs to conceal facts, as they are paid by them."

The problem follows a chain of recent financial scandals. These include a leading Chinese dairy company, the Yili Group in the Inner Mongolia Autonomous Region, five of whose senior executives have been arrested on charges of for embezzlement of public funds.

The Sichuan Changhong Electric Co., China's leading TV producer, has reported a possible huge loss. It may be unable to collect 310million US dollars from its US importer Apex Digital Inc.

The China Aviation Oil (Singapore) Corporation, which sources jet fuel for China, is in deep trouble after losing 550 million US dollars in speculative oil trades, triggering concern for other China-linked stocks.

"The pack of problems reveals that companies listed in China are in great needs of financial auditing control and senior posts shifting," said Wang Kangmao, the CEO consultant with the Singapore stock exchange, "By doing so, could we prevent the expansion of personal power effectively."

"And financial auditing should be conducted as frequently as every six months," Wang added.

Source: Xinhua