Hundreds of inspectors from the National Audit Office (NAO) have been sent to the State Grid Corporation of China (SGCC), the country’s largest state-owned electric utility company, to conduct accountability audits of the company’s top management.
The massive audits started in mid-April and will last until October, targeting SGCC’s top executives including Chairman Liu Zhenya (pictured), a source close to the NAO said. The 62-year-old Liu joined the utility in 2000 and is about to retire.
According to the South China Morning Post, the NAO and other authorities had previously received letters alleging financial irregularities and corruption involving company’s top management. Liu is under scrutiny for being indirectly responsible for the alleged problems.
Liu had also pushed through a controversial high-voltage electricity transmission project while serving as SGCC’s general manager. Audit inspections conducted last year uncovered irregularities at China Electric Power Research Institute, SGCC’s research division which provided technology support for the project.
Meanwhile, Zhu Changlin, head of SGCC’s north branch and a major promoter for the project, became the latest subject of a graft probe, sources said. Zhu was reportedly connected to Li Chuncheng and Guo Yongxiang, two senior officials in Sichuan province who are being investigated for alleged corruption.
Auditors may also look into SGCC’s overseas assets and private contractors.
Shares in Chongqing Fuling Electric Power Industrial Co., a subsidiary of SGCC, have dropped by 28 percent since the audit actions began.
Auditors were also sent to state-owned China Power Investment Co. (CPIC) and at least five other state power companies. Regular audits will be conducted on CPIC’s general manager Lu Qizhou, who is expected to retire in June.
Sources: Caixin (财新网), First Financial Daily (第一财经日报), China Times (华夏时报), South China Morning Post
Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.