Lifelong liability aims to improve oversight of SOEs

On 23 August, the General Office of the State Council issued the Opinions on Establishing a System for Pursuing Liability for Illegal Operations and Investments by State-Owned Enterprises. The opinions are an integral part of the series of documents for intensifying the reform of state-owned enterprises (SOEs).

THE OBJECTIVES

Aiming at improving the oversight of state-owned assets and preventing the squandering of them, the opinions set the following objectives: creation of a system for pursuing liability for illegal operations and investments by SOEs and a liability retracing mechanism by the end of 2017, so as to set the rules for pursuing liability; and comprehensive establishment of a liability pursuit work regime covering authorities that perform investment duties and SOEs at every level, so as to give rise to a liability pursuit work mechanism in which the duties and procedures are clearly defined.

For each SOE, the first order of business will be the establishment of its own system for the pursuit of liability for illegal operations, giving greater detail to the principles, scope, basis, triggering mechanism, procedure, method, criteria and duties of and for operation and investment liability pursuit, and submitting the above-mentioned regulations to the authority performing the investor duties for the record.

Wang Jihong is a partner and Liu Ying is an associate at Zhong Lun Law Firm