Leaked minutes from a closed-door speech have revealed details of corruption within Cosco as well as divisions over the proposed merger with fellow Chinese state-owned firm China Shipping Container Lines (CSCL).
The minutes, which were reported by Beijing Daily’s official Wechat account and reproduced by several news outlets before being deleted, concern a speech by Cosco’s new discipline inspection head, Xu Aisheng.
The leaks include a section where Xu divulges that he berated both the Cosco chairman Ma Zehua and the CSCL chairman Xu Lirong for their handling of the expected merger between the two carriers.
He stated: “I asked Comrade Ma Zehua: ‘When you and Xu Lirong, these two big bosses, drafted this plan, did you remember that you have another identity as party secretary?! Did you remember? The plan doesn’t have a single word about how to strengthen the leadership of party committees and party organisations. Not a single word. What kind of reform is this?”
Also disclosed is Xu saying that high rents of ships and other major investment mistakes caused the company’s huge losses and made it party to illegal activities.
According to the South China Morning Post, Xu stated that the group used up to 20,000 freight brokers, 56 of whom were prohibited by regulations, including some with family ties to the group’s party committee.
Xu reportedly said: “We are asking all units for accountability.” Golfing and unnecessary travel by company bosses, as well as irregular hiring and delayed retirement were among other key issues raised by him during the meeting.
Cosco posted a net loss of 9.56bn yuan ($1.50bn) in 2012, preceded by a 10.45bn yuan (US$1.64bn) net loss a year earlier. Following the losses, former executive director Xu Minjie resigned in 2013 amid corruption investigations.
The company’s new discipline inspection head, who was appointed in July this year for a one-year term, previously worked as the deputy director general and director general of China National Audit Office, and participated in several anti-graft investigations.
During the meeting, he reportedly said: “Japanese dry bulk shipping lines are facing the same difficulties, yet they can make money, why can’t you?”