Tuesday, May 04, 2004

Mark my words, there will be trouble with this round of audit. One of the targets of the latest NAO audit is China Netcom, which is run by Jiang's son Jiang Mianheng. It could be an attempt to finally blackmail Jiang into giving up the CMC position. But, as they say, Jiang will not stand "idly by." We will see what happens:
China to audit key state firms

China is planning its strictest audit yet of key state firms
China's state auditor is to investigate the accounts of nine key Chinese companies owned by the government.
It would be the most stringent ever study made by the National Audit Office, the Xinhua news agency said.

So far, 22 state-owned firms have been checked by the auditor, which plans to look into businesses in technology, manufacturing and petro-chemicals.

One target will be the China National Offshore Oil Corporation (CNOOC), China's biggest offshore oil firm.

The CNOOC has already been investigated by the Hong Kong stock exchange after making deposits to a finance firm controlled by its parent.

Also on the list to have their books checked are China Electronics Science and Technology Corporation, China Netcom Corporation and the State Tobacco Monopoly.


The trigger for the decision to investigate on such a wide scale was the discovery, in February, of 5.4bn yuan ($652m) worth of accounting irregularities at the state-owned predecessor to China Life.

China Life went public in the world's biggest initial public offering (IPO) last year, raising $3.5bn.

The investigation into the irregularities has attracted attention from a number of international organisations.

The Securities and Exchange Commission (SEC) is conducting an informal investigation and the firm also faces a lawsuit from US investors.

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