China introduces collective decision-making for state companies to curb corruption

China announced Thursday it would introduce a new collective decision-making procedure into its powerful and profitable state-owned enterprises (SOEs) in a bid to strengthen anti-corruption efforts and guard against financial risks to those companies.

All important decisions, appointments of key officials or executives, arrangements of major projects, and the use of large quantities of capital inside the SOEs must now be jointly decided by their collective leadership, said a statement released by the General Office of the Central Committee of the Communist Party of China (CPC) and the General Office of the State Council, or China's Cabinet.

The statement highlighted China's increasing pressure to keep executives of its profitable SOEs under the public's direct supervision.

Thirty-five senior executives of China's large SOEs, such as former Sinopec chairman Chen Tonghai, faced corruption charges last year and 31 of them were found to be connected to cases involving an average of 110 million yuan (16.2 million U.S. dollars).

With the new procedures, SOEs are expected to improve their decision-making mechanism by modifying the rules of procedures that include public participation, expert consultations and collective decisions concerning major issues, according to the statement.

Development strategies, filing for bankruptcy, restructuring, mergers and acquisitions, transfers of ownership and overseas investment plans by SOEs are all to become subject to such collective decision making practices, said the statement.

The SOEs' annual investment plans, financing, financial derivatives such as options and futures, imports of key equipment and technologies, bulk purchases and construction of major projects also would now need approval from their collective leadership, according to the new procedures.

Source:Xinhua