Cosco Group Inflated Profits by $20m, Audit Finds
Global shipping leader, Cosco Group, has been found to have falsified profits, according to a 2014 work report released over the weekend by China’s National Audit Office.
The findings show Cosco Group falsified documents related to RMB 298m ($48m) in revenue and RMB 169m ($27.2m) in expenses. Overall, the company is accused of overreporting its net profit by RMB 129m ($20.7m) for the five year period between 2008 and 2013.
The report found severe operational violations in two of the group’s subsidiaries – Cosco Logistics and Cosco Dalian Shipyard- which contributed to massive earning losses. Additionally, the audit cited Cosco Group for lacking risk management and supervision in its ship chartering operations. Around RMB 34.1bn ($5.49 bn) in losses for long-term charter deals were reported from 2009 to 2013.
A total of fourteen state-owned companies were found to have financial irregularities in this latest government probe. Between them they have racked up falsified profits in excess of RMB 19bn ($3bn) over the course of the audit period.
This week’s audit report are part of a massive anti-corruption campaign launched by President Xi Jinping. The main focus of the initiative has been to isolate improper allocation and management of funds among government funded endeavors. Over the past two years the administration has rounded up around 100,000 officials in connection with corruption.
China’s National Audit Office has asked Cosco Group to release their own report detailing corrections to both revenue and expenses incurred over the audit period, which will then be made public.