China spends big hiring independent firms to supervise SOE overseas assets

BEIJING - China will spend 11.39 million yuan ($1.86 million) to ensure a thorough examination of overseas assets of state-owned enterprises (SOE), it was announced Wednesday.

Seven independent accounting firms will oversee the examination of SOE assets abroad, according to a statement posted on the website of the State Council's State-owned Assets Supervision and Administration Commission (SASAC) on Wednesday.

The Supervisory Board for Key Large State-owned Enterprises, under the SASAC, contracts third parties to supervise SEO major projects and overseas assets, to ensure transparency.

SASAC made seven contracts open to bidding, three of which concern the examination of SOEs overseas assets, and four concern the examination of SOEs key projects.

It is estimated that the more than 110 centrally-administered SOEs held overseas assets worth more than 4.3 trillion yuan ($698 billion) as of the end of 2013.

In 2014, inspections were launched on 11 companies including China Shenhua Group and State Grid.

The independent financial firms handling this round of supervision, including PricewaterhouseCoopers (PWC), must be work within the Chinese legal framework, have more than 200 certified public accountants and be qualified to provide services to the government.

The firms must have no record of major law violations or administrative punishment by financial departments in the past three years, and their activities must not have been restricted by authorities in the same time frame.