Managers of China's state-owned enterprises (SOE) may not use their positions to profit from the capital markets, the sector's regulator said on Wednesday.
SOE managers should not take advantage of their easy access to inside information about plans for listings, refinancing moves or mergers and acquisitions to profit, either for themselves or for those they have special relationships with, said Jia Fuxing, discipline inspection chief of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council.
He also said that corruption should be curbed in the process of asset integration and the introduction of strategic investors.
SOE managers are also not allowed to provide any advantage for their business partners to engage in business activities, China Securities News reported.
Jia stressed that enterprise leaders could not force accountants to make false fiscal reports, and arbitrary bonus sharing was also banned. Supervision of SOEs has become more difficult as the sector's assets and profits have soared in recent years. It is more complicated to oversee the state shareholding in listed companies as well, as many shares have come out of their lock-up periods and onto the market, said Li Rongrong, chairman of SASAC.
Li reiterated that SOEs should improve their corporate governance while authorities should set more specific rules to prevent insider trading and other illegal activities.
To monitor possible economic crimes, many companies have sent discipline inspection forces to their subsidiaries across the country.
(Xinhua News Agency March 7, 2008)
