Cosco, China’s largest maritime conglomerate, has suffered an embarrassing leak, which lays bare the corruption and nepotism that has bedevilled the state-run giant for years.
The minutes of a closed-door meeting were reported by Beijing Daily’s official Wechat account and reproduced by news outlets at the weekend before being deleted.
Xu Aisheng, Cosco’s newly appointed discipline inspection head, was quoted detailing the huge charters Cosco had paid out and other investment errors, and how the company had possibly been involved in illegal activities.
“We are asking all units for accountability,” Xu was reported saying.
A number of the shipbrokers used by Cosco should never have been used given their close relationships to senior Cosco officials, the minutes reveal.
Golfing and unnecessary travel by company bosses, irregular hiring and delayed retirement were some of the other key issues Xu detailed.
The news will send shockwaves to many Cosco officials, both still working or recently retired. Xu is one of China’s top anti-graft investigators, parachuted in from the National Audit Office to clean up operations at Cosco. Among Xu’s previous high profile investigations was one which sent former railways minister Liu Zhijun to prison.
“Japanese dry bulk shipping lines are facing the same difficulties, yet they can make money, why can’t you?” Xu said in the leaked minutes.
The minutes also reveal that Cosco and China Shipping top managements met last week to discuss merging the two companies, a massive process, details of which are likely to be revealed in the next month.
Cosco has long been viewed sceptically, especially by investors in Hong Kong. One of the company’s arch-critics, Charles De Trenck, an analyst and Splash columnist, wrote recently on Cosco: “When a company has a group of people who jockey their way to the top and then get handed the purse strings of a behemoth with hidden nooks to hide things, seemingly bottomless pits to continue reorganising, free money from governments, it is easier to pretend to be competent. Until the music really stops.”