State-owned China Shipping Group (CSG) has been upbraided in a report by the National Audit Office, charging the shipping firm of irregular accounting standards and poor corporate management.

The audit office said the report was based on CSG’s 2012 full year financial results, and it scrutinised the finances of eight subsidiaries of the group.

CSG, China’s second largest shipping conglomerate, was found to have accounting and financial management problems, generally pointing to irregular reporting of net profits and debts by the subsidiaries under scrutiny.

There were also issues with false reporting of company benefits for certain staff, personal taxes being beared by the company, travel claims exceeding stipulated limits, and undercharging of office rental to associated companies.

The report also cited CSG’s problems over the carrying out of national economic strategies and the implementation of major business decisions. CSG had started shipbuilding work at a Jiangsu-based yard before construction approvals were obtained, and it failed to get its paperwork in order after acquiring and using a 3713.81-acre of undeveloped land. CSG was also faulted for not going through the proper internal clearance before it disposed of 20 ships.

There were also internal management problems leading to irregularities in bunker fuel purchasing, vessel chartering as well as the covering up of accidents.

“The audit commission has issued the audit report in accordance to the law. CSG is required to publicly clarify the findings of the report,” the audit report said. The report added that the persons concerned are now suspected of infringing the law and further investigations are underway.