China auditor uncovers fraud, graft in public housing

BEIJING, July 18 Fri Jul 18, 2014 6:30am EDT

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BEIJING, July 18 (Reuters) - Funds totalling aeveral billion yuan, meant for the construction of China's public housing, was misappropriated last year as thousands of homes were allocated to undeserving families, according to a state audit published on Friday.

Corruption in public housing is a sensitive issue as state-subsidised homes are intended to ease the difficulties of millions of consumers, for whom home ownership is out of reach given record property prices.

The National Audit Office found that 9.3 billion yuan ($1.5 billion) of funding set aside for public homes was misused for unrelated projects through sometimes fraudulent means.

Nearly 8 billion yuan of that sum was used to finance other projects such as the construction of industrial parks and public infrastructure, it said.

The remaining 1.3 billion yuan was misappropriated by agencies or individuals who fraudulently obtained funds intended for refurbishing shantytowns by submitting false applications.

It was also found that 45,800 public homes and 50.4 million yuan worth of cash were either awarded, sold or rented to families that were not eligible for public housing.

Chinese consumers have complained about public homes that are badly constructed or subject to corruption, with government officials keeping better-quality apartments for themselves.

The audit, the latest of a series conducted on government ministries and agencies, covered 33,500 public departments and 272,500 households.

It comes in the middle of an anti-corruption drive launched by President Xi Jinping which has felled some senior officials. ($1 = 6.2075 Chinese yuan) (Reporting by Shao Xiaoyi and Koh Gui Qing; Editing by Ron Popeski)