China to thoroughly audit four major financial assets management companies

China will launch a thorough audit of its four major financial assets management companies, sources with the ongoing session of the Standing Committee of the National People's Congress (NPC) said on Tuesday.

An audit of the big four in 2004 found rampant irregularities in their business operations, said a report submitted by the National Audit Office to the session.

The audit covered 554.4 billion yuan of non-performing assets disposed of by the four companies, accounting for 39 percent of the total. The irregularities involved 71.549 billion yuan, about 13 percent of the total audited assets.

By the end of March, China's four major financial assets management companies had retrieved 140.89 billion yuan (17.1 billion US dollars) in cash, or one fifth of the total disposed non-performing assets, drawn from the country's four major state- owned banks, according to the figures released by the China Banking Regulatory Commission (CBRC).

The audit attributed the result to illegal procedures, falsification, little transparency, interference from local officials and individual embezzlement.

To improve the performance of the four companies, which were formed mainly to help state-owned banks to deal with their non- performing assets, the NPC Financial and Economic Committee Tuesday appealed to the legislature for a comprehensive audit on those companies.

The top legislature has a right to ask the central government to report on the use of central budget, and the auditor has a legal right to audit any organization sponsored by public budget.

The four companies -- China Huarong Asset Management Corp., China Great Wall Asset Management Corp., China Orient Asset Management Corp. and China Cinda Asset Management Corp. -- were created in October 1999.

Source: Xinhua