Sunday, May 12, 2013

China State Auditor Finds Irregularities at Huaneng

China State Auditor Finds Irregularities at Huaneng, Other State Firms

10 May 2013, Dow Jones Global News Select

BEIJING--China's state auditor said Friday that it had uncovered major
policy violations at China Huaneng Group Corp, the nation's top power
producer, including the building of power plants without approval.

The utility group had started construction on 16 large projects,
including the Huangdeng Hydropower Station, as of the end of 2011
without prior approval, the National Audit Office said in a series of
reports posted on its website.

A total of 5,417 hectares of land related to 75 projects that Huaneng
had started work on didn't have the necessary permission for land use,
the auditor said, adding that the Qimashan Wind Farm in Yunnan Province
was one of them.

Separately, the auditor said it also found irregular lending by several
major state banks.

In 2011, the Agricultural Bank of China lent a total of 644 million yuan
($104 million) to enterprises that were either incapable of repaying or
gave false information, according to the auditor, adding that most of
those credits eventually became nonperforming loans.

China Construction Bank lent CNY3.66 billion to companies and projects
that did not meet credit requirements while customers of the
Import-Export Bank of China apparently misappropriated some CNY5.5
billion of credits from the bank, the auditor said.

The auditor also said it found two subsidiaries of China Minmetals Corp
had traded in futures, losing a total of CNY27.2 million, and China
National Aviation Holding Company had begun construction of an office
building, which was estimated to cost about CNY1.345 billion, without
the approval of the nation's top economic planner.

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