Auditors accuse Cosco of falsifying profit by omitting revenues
CHINA's National Audit Office has issued a report accusing state-run Cosco, the nation's largest shipping line, of serious financial irregularities as the leadership in Beijing tightens its crackdown on corruption.
The mainland's highest audit authority found that Cosco Group had falsified its earnings between 2008 and 2013, leaving out US$48 million in revenue and $27 million in expenses, registering a net profit that was $20 million less than declared, Newark's Journal of Commerce reported.
Group subsidiaries Cosco Logistics and Cosco Dalian Shipyard were also found by the auditors to have engaged in illegal activities, including bribery and operational violations.
A lack of risk management and supervision saw Cosco Group losing $5.5 billion between 2009 and 2013 when a gamble on long-term charter rates came spectacularly unstuck as the rates tumbled, demand fell off and shippers defaulted on contracts.
The National Audit Office said the illegal activities just unearthed in its latest report would be investigated by the authorities.
Cosco is believed to hold 43.5 per cent of the China's gross shipping tonnage, according to the Shanghai International Shipping Institute.