Management integrity of at least 70 listed companies is threatened, according to reports
Corruption has made deep inroads into the Chinese capital market and threatens the management integrity of at least 70 publicly listed companies, according to media reports.
"Nearly all corrupt officials had ill-gotten incomes from business organizations," a commentary in the Beijing-based Guangming Daily said.
Many companies and enterprises have served as "money printers and automated teller machines" for corrupt officials, the commentary added.
According to Hithink Royalflush Information Network, an online financial information site in Hangzhou, Zhejiang province, out of 70 problem-plagued companies, the largest group consists of 18 in industries such as oil, coal mining and nonferrous metals.
Six of the 70 are in the real estate sector and another six are financial companies.
State-owned and non-State companies are among those with executives suspected of being corrupt and of having corrupt official ties, Hithink said.
Beijing News said listed companies in high-profit and monopoly industries bribe officials by giving them shares, manipulate stock prices and transfer benefits through mergers and acquisitions in the capital market.
Some senior executives have been taken away by the anti-corruption watchdog to help with investigations, while others have been accused of accepting bribes and of other illegal activities.
One of the largest companies involved is State-owned China National Petroleum Corp, the country's largest oil and gas producer and supplier, with a market capitalization of 2 trillion yuan ($320 billion).
Forty-five executives and employees from the company are under investigation on suspicion of corruption, bribery and bribe-taking.
According to Hithink, the investigation into the company also covers alleged illegal activities at its Hong Kong-based subsidiaries Kunlun Energy Co and Wison Group and at its Shanghai-listed Sichuan Star Cable Co.
Anti-corruption watchdogs reported an investigation into Shenhua Group Co, the largest State-owned coal-based integrated energy company, on Feb 5.
Another listed company, Shanxi Coking Coal Group Co and its three subsidiaries from Shanxi, the country's largest coal-producing province, have all been investigated.
The report said Ren Runhou, a former vice-governor of Shanxi province who has been arrested, previously chaired Lu'an Group, one of Shanxi's seven major coal companies.
In the financial sector, the most recent case is that of China Minsheng Banking Corp, the country's biggest private lender. The bank's president, Mao Xiaofeng, resigned for personal reasons after reportedly being implicated in the corruption case of Ling Jihua, a former senior political adviser.
Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said officials holding shares in listed companies can to some extent give protection to a company, for example by reducing project examination and approval procedures and by covering up some illegal activities.
On Monday, China National Radio reported that the business department handling wine imports at China National Cereals, Oils and Foodstuffs Corp, the country's largest oil and food importer, spent more than 200,000 yuan on wine during a two-day party at a luxury hotel in Yunnan province.
The anti-corruption watchdog investigated COFCO from March 27 to May 9 last year and found some irregularities, including company money being spent on playing golf and to bribe officials.
chenjia1@chinadaily.com.cn
