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Cosco falsified earnings from 2008-13, China audit finds

Cosco falsified earnings from 2008-13, China audit finds
China Cosco Group, the country’s largest shipping conglomerate, has been found to have falsified its earnings, according to an audit report released by National Audit Office, amid China’s ongoing fight against corruption.

The report issued on Sunday wrote that Cosco had falsely left out a sum of RMB298m ($48m) in its revenue for the period from 2008 to 2013, as well as leaving out an expense sum of RMB169m, leading to a total net profit that is RMB129m less than reported.

The report further detailed that several of the group’s subsidiaries had been involved in illegal activities and financial irregularities during the six-year period of 2008 to 2013.

The fradulent activities ranged from operational malpractices, shady deals under the guise of business expansion, and bribery among officials.

From 2009 to 2013, the group suffered a total loss of RMB34.1bn from its long term charter deals, amid falling charter rates, low cargo demand and defaulted contracts, due mainly to a lack of risk management and operational supervision.

The National Audit Office said the corrupt activities at Cosco will be further investigated by the relevant authorities.

The office said a key focus of its work was to reveal violations in the approval, allocation and management of public funds, state-owned assets and resources.

Cosco is not the only state-owned enterprise to come under the office’s scrutiny. A total of 14 state-owned enterprises are investigated, including State Grid Corp, China Southern Power Grid Co, Bank of Communications and China Development Bank.

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