A lawmaker and an anti-graft expert warned yesterday that State-owned enterprises (SOEs), without tightened and transparent supervision, are more likely to become corrupt.

An anti-corruption conference held in Hu'nan Province, South China.

Analysts stressed that China is in great need of anti-corruption officials, given that such incidents have become increasingly common across the country.

One such ongoing incident involves an investigation into a nuclear-program official's possible involvement in a graft scandal.

The publicity department of the China National Nuclear Corporation (CNNC) declined to comment yesterday on its general manager, Kang Rixin, who authorities are probing for possible involvement in "grave violations of discipline," according to a statement made Wednesday by the Discipline Inspection Commission of the Communist Party of China Central Committee.

Cheng Fu'en, director of the Academy of Marxism at the Chinese Academy of Social Sciences, said the frequent occurrence of corruption cases in large-scale State-owned enterprises is due to inefficient administrative and supervisory systems.

State-owned enterprises must be led by boards of directors or a similar bodies, which are supervised by boards of inspectors rather than individual people. At the same time, the companies' chief financial officers should be directly designated by the State-run Assets Supervision and Administration Commission (SASAC), Cheng said, adding that the mechanism isn't well established.

Cheng also noted that the National People's Congress (NPC) doesn't currently have a channel to supervise government management of State-owned assets.

Cheng suggested that a report on State-owned assets should be introduced during the annual session of the NPC for deliberation and discussion, and to strengthen the supervision of the State Council and the SASAC on their management of State-owned assets.

An official with the anti-corruption bureau of the Supreme People's Procuratorate told the Legal Daily yesterday that the country is in great need of anti-corruption officials.

Procuratorates at the local level usually have only three to four officials fighting corruption, while such cases total about 30,000 per year, on average, the report said.

Ironically, Kang had been elected in 2002 as a member of the Discipline Inspection Commission, the nation's top anti-corruption body, according to a copy of his resume posted online by People's Daily.

Kang's suspension from his post came weeks after a July 12 ruling by the Communist Party of China (CPC), which moved to regulate the truthfulness of State-owned enterprises' leaders in an attempt to curb corruption.

According to the regulation, company leaders aren't allowed to violate company principles and procedures to make major policies on production management, appointments and removals involving key positions or management of large sums of money.

Neither should they adjust the salaries, bonuses or other benefits for company directors without the approval of personnel departments.Kang's was among a slew of cases of high-ranking SOEs executives – including one involving the death sentence for a former head of State-owned oil refiner, Sinopec – that have set off alarms of misconduct in centrally administered companies.

"The loopholes rooted in the management structure of SOEs lead to high-profile corruption cases," Wang Yukai, a professor with the China National School of Administration, told the Global Times.

There is a lack of an institutional framework, Wang said, referring to the selection and supervision of executives.

"SOE executives possess power and money, making it easy to give rise to corruption," Wang warned.

Last month, Chen Tonghai, the former head of Sinopec, was sentenced to death with a two-year reprieve for graft totaling nearly $30 million.

Despite a host of measures to address corruption at SOEs, including the establishment of criminal-investigation divisions at SOEs and financial institutions, Wang said, these measures may be effective for second-tier executives, but not for top-tier ones.

Cheng Kangming, director of Hong-Kong regitered www.cnzyff.org.cn, a non-governmental, anti-corruption and rights-protection website, told the Global Times that most exposed corruption cases of high-level officals are reported by whistleblowers, as the public doesn't have access to inside information of the corporations.

And the informants and those who engage in anti-corruption always face great pressure from various aspects and the risk of revenge, which, Cheng said, is connected with corruption among judicial and law-enforcement authorities, including procuratorates, courts of justice and public security agencies, as well as inefficient supervision by the National People's Congress and local people's congress at all levels.

(Global Times August 7, 2009)