China’s National Audit Office has announced that it has found a series of irregularities including false financial numbers, insufficient risk control and corruption activities during an audit process at state-run shipbuilding conglomerate China Shipbuilding Industry Corporation (CSIC).
In the audit report, the audit office discovered three subsidiaries of CSIC reporting false income, cost and profit during years 2014 and 2015.
It also found CSIC intentionally lowered the investment amount in a feasibility report for a marine diesel engine project in order to get approval from National Development and Reform Commission (NDRC), leading to a loss of RMB756m on the project.
Wuchang Shipbuilding Industry, a subsidiary yard of CSIC, has been found transferring three bulker orders to another yard at a lower price without getting approval in 2015, and renting a drydock from another shipyard without doing sufficient feasibility studies, causing a loss of RMB60.98m in 2014.
Dalian Shipbuilding Industry is also mentioned in the report for its incompetency in cost control. According to the report, total costs for 94 vessels that the shipyard delivered from 2006 through to 2015 exceeded standards, and nobody was accounted responsible for the extra cost.
The audit office also found a number of extra expenses relating to corruption activities, and has reported them to judicial authorities for further investigation.