Green product fraud nets companies $264m in subsidies

Several leading Chinese companies have illegally obtained hundreds of millions in energy-saving subsidies, China's national auditing watchdog announced late Friday.

According to a report posted by the National Audit Office (NAO) after auditing thousands of energy-saving projects, 348 companies have been caught creating fraudulent data and illegally receiving as much as 1.62 billion yuan ($264 million) of subsidies in 2011 and 2012.

Among those companies, eight were leading Chinese home appliance producers - including Midea Group, Sichuan Changhong Electric Co and Gree Electric Appliances Inc - who overstated their sales of energy-saving products between 2011 and 2012 as a way to get subsidies amounting to 90.6 million yuan, said the NAO.

Shanghai General Motors and Shanghai Volkswagen were also on the malfeasance list, and have been found to illegally claim 17.3 million yuan during the same period by producing hybrid vehicles that did not actually meet the country's standard.

In the past two years, the central government has allocated more than 80 billion yuan in 18 provincial-level regions to fund energy-saving projects and boost domestic demand for energy-saving products, aiming to drive energy conservation and emissions reduction for the world's biggest energy consumer.

NAO said some 214 million yuan has been retrieved, and the judicial authority is investigating cases involving 41 people.

It is not the first time the NAO has found illegal activity in the use of energy-saving money.

In May, the office disclosed that 35 local authorities and project implementation units had illegally used 270 million yuan of energy-saving funds in 2010 and 2011.