CHINA TOPIX

Updated 2:12 PM EST, Wed, Jan 29, 2020

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Chinese State-Owned Oil Company to Divest Itself of Hotels and Cars

China National Petroleum Corporation

(Photo : Photo : Reuters/Kim Kyung-Hoon) China National Petroleum Corporation (CNPC) is cutting down on overspending as the government's campaign against corruption increases.

A Chinese government-owned oil company has announced on Monday that it will divest most of its hotels and let go of several thousand vehicles. The move is seen as an effort by the company to stamp out graft and corruption within its ranks.

Reuters reported that this move by China National Petroleum Corporation (CNPC) may have been motivated by the ongoing crackdown against corrupt officials and extravagant expenditures. Two years ago, after assuming power, President Xi Jinping launched a nationwide campaign to get rid of corruption in the Chinese communist party.

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Several top party officials have been sent  behind bars and others have been probed by government inspectors. One such executive is Song Lin - the former head of China Resources. Song was recently stripped of his party membership after he was found guilty for corruption.

CNPC officials have praised the Central Commission for Discipline Inspection, which has conducted a review of the company's operations. An official statement from the oil giant said that government inspectors greatly aided them in finding out the probable sources of corruption as well as keeping unnecessary spending at a minimum.

Within two years, all of the CNPC-owned hotels will be auctioned except for a few profitable hotels or those in places where it is the only available place offering such service.

CNPC and most other companies owned by the government usually expand to other enterprises outside the scope of their main business.

Aside from the hotels, more than 4,000 CNPC service vehicles will also be sold. Several other state-owned entities are carrying out similar measures.

Government inspectors found that company funds were used by a number of officials to finance their trips and gambling sprees overseas. Some of those officials disappeared after leaving China for abroad for business.

Meanwhile, government inspectors recently finished a review of another state owned company - China National Offshore Oil Corporation. On Sunday, CNOOC published its resolution to stop wasteful spending including refraining from using funds to purchase personal luxury items for its executives.

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