Text: | Print|

Auditor says mismanagement to blame for CIC investment losses

2014-06-19 10:13 Shanghai Daily Web Editor: Si Huan

Investment losses incurred over a five-year period by China Investment Corp, the nation's sovereign wealth fund, were due to mismanagement, the country's top auditor said on Wednesday.

CIC, which handles US$575 billion of the nation's wealth, was accused of neglect of duty, and inadequate due diligence and post-investment management in relation to 12 overseas investments from 2008 to 2013, the National Audit Office said in a statement following an audit conducted last year.

Six of the deals were unprofitable, four had unrealized losses, and two had the potential to lose money, the auditor said without elaborating.

Overseas investments made by CIC returned 8 percent last year, following a 10.6 percent gain in 2012, and 4.3 percent loss in 2011.

The auditor also said that in 2011 CIC unit Central Huijin Investment Co missed out on a potential profit of more than 1.2 billion yuan (US$193 million) after failing to carry out a required asset appraisal.

Similarly, a land development unit of CIC was found to have violated restrictions by investing 8.3 billion yuan in a property development, the NAO said.

Meanwhile, in separate statements, the auditor accused the Bank of China and the Agricultural Bank of China of extending 13.2 billion yuan worth of illicit loans over the past decade.

In the 2004-12 period, six branches of BOC agreed 6.4 billion yuan worth of loans, while in 2006-12, 10 branches of the AgBank extended loans totaling 6.8 billion yuan.

The two banks relaxed their lending criteria, violated lending procedures and failed to properly verify application documents, the auditor said.

During the course of its audit, the NAO inspected 7.1 trillion yuan worth of assets of BOC and 739.6 billion yuan worth of assets of the AgBank.

The office also yesterday announced details of 35 cases involving bribery, embezzlement and other disciplinary charges handled in the first five months of this year.

The most common offense among officials was accepting bribes, the NAO said.

In one instance, Du Bidong, a transport official in Shaanxi Province, was sentenced to 15 years in prison for accepting bribes worth more than 4.5 million yuan, it said.

In another, Shanghai-based Bright Food (Group) Co was found guilty of colluding with four engineering firms to cheat 12.6 million yuan from the public coffers.

All of the companies involved in the cases have been punished and the missing funds recovered, the office said.

Comments (0)
Most popular in 24h
  Archived Content
Media partners:

Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.