December 17, 1999
Company funds spent on securities speculation, flood control money squandered on building a new hotel, billions stolen to set up a company and bogus stock listings are among the misdeeds uncovered by government auditors this year.
Audits uncovered cases of fraud, official misconduct and waste at hundreds of banks, government offices and state-owned companies in all corners of the mainland.
Auditor-General Li Jinhua did not give a total figure yesterday for the amount of misused and stolen funds discovered this year, but he did provide details on the extent of the problem.
“These problems are caused mainly by a lack of experience in running the market economy and some loopholes in the legal system and also some individuals committing corruption,” Mr Li said.
At least 10 per cent of the 17,000 senior officials and state company managers audited had been punished or demoted for misconduct, he said.
One of the most blatant cases the auditors found involved former Ministry of Finance officials who had misappropriated 70 billion yuan (HK$65.7 billion) to set up the Science and Technology Investment Corporation.
In another, a government department built an office block, the Jinlong Tower, in Shanghai’s Pudong district. That and many other buildings constructed with stolen or misused funds will be auctioned off by the State Council.
Misspending of the 32.25 billion yuan budgeted for flood control and irrigation works cost the mainland at least 3.02 billion yuan. A further 16 per cent of the total lay idle because local governments were not adequately prepared to spend the money, said Zhai Xigui, a vice-minister in the National Audit Office.
Officials in charge of water control along the Yangtze River used nine million yuan to build a hotel, Mr Zhai said.
In many cases, local officials used water works budgets to pay their own salaries, distribute bonuses and speculate in the stock market.
Audits of two major state-owned banks, the Industrial and Commercial Bank of China and the China Construction Bank, found 170 cases of corruption involving 220 people. Branch offices had overstated assets and equities worth 200 billion yuan and kept 200 billion yuan in off-the-record assets.