Recently, Zhejiang Guomao Group, a state-owned enterprise, was exposed to multiple issues involving senior management personnel accepting high-end banquets and paid companionship at KTV. Zhejiang Guomao Group has reported that certain employees of its holding subsidiary, Zhejiang Business Assets, including Mr. Xu, have been reported and are under investigation. The three individuals involved have been suspended from their duties.
According to a report by The Paper, the whistleblower, Mr. Zhao, claimed that in 2023, in order to promote a 600 million yuan asset packaging business, Mr. Xu and others were entertained six times, with expenses exceeding 500,000 yuan. Mr. Xu hinted at demanding a substantial kickback, and when refused, the project was put on hold, leading to its failure.
Southern Bay Financial News reported that Zhejiang Guomao Group is ranked among the top 500 enterprises in China, with four listed companies including Kangmei Pharmaceutical under its umbrella. The group holds up to 12 financial licenses, with Zhejiang Business Assets playing a crucial role in the financial operations of Zhejiang Guomao, serving as the first licensed institution for non-performing asset management in the province. As of the end of March this year, the company had acquired over 670 billion yuan in debt principal.
The 2026 campus recruitment brochure of Zhejiang Guomao Group states that it is a large provincial state-owned enterprise with over 300 subsidiary companies and more than 27,000 employees. It holds shares in Kangmei Pharmaceutical, Zhejiang Dongfang, Intco Group, and Yilida, four listed companies, maintaining its position among the top 500 Chinese enterprises for many years.
Zhejiang Business Assets is a key executor of financial operations under Zhejiang Guomao Group.
A commentary article in Extreme Vision News expressed that from the exposed videos, the cuddling and revelry in KTV private rooms, extravagant spending in five-star hotels, and the more than 500,000 yuan spent on six visits all point to the scandal of senior executives of state-owned enterprises accepting paid companionship and hinting at bribery. Business visits have turned into feasts of wining, dining, and entertainment, with companies ignoring kickbacks leading to project delays. As the “gatekeeper of state-owned assets,” how dare they act so brazenly?
The article also pointed out that from months of unnoticed irregular consumption to the reliance on individual reports for the problems to be exposed, the internal audit and compliance departments seem to be merely for show.
On December 5th, Zhejiang Guomao Group announced that employees of its holding subsidiary, Zhejiang Business Assets, such as Mr. Xu, were reported, leading to an investigation. The three individuals involved have been suspended and will face disciplinary actions.
Such scandals are not isolated cases. Senior executives of state-owned enterprises in various regions, including Shandong Water Affairs, have been implicated in similar disciplinary issues.
In February 2023, the chairman of Shandong’s state-owned enterprise, Linyi Water Affairs Group, Mr. Zuo Guodong, was reported to have been invited to a KTV nightclub for entertainment activities, including paid companionship, with all related expenses being covered by a private enterprise.
Following official media reports, it was confirmed that the allegations of paid companionship against Zuo Guodong based on online reports were true.