Sinosteel may face management audit

Sinosteel, the country's largest iron ore trader, said Thursday that its financial management is under control after reports spread Monday that the company was suffering from major problems.

"Sinosteel's businesses both at home and abroad is running normally and orderly. As of the end of August, our sales revenue and profits reached the highest level in history," said the company, providing no exact figures.

Sinosteel didn't mention whether the National Audit Office (NAO) had audited the company's finances as media reported. But a source told the Global Times that the NAO did visit the company in May.

The NAO found problematic commissions totaling $50 million, Century Weekly Magazine reported Monday.

"These commissions were paid in cash, which is rare. Normally, the company pays commissions through contracts that account for three to five percent of trading value," the magazine quoted a senior executive with Sinosteel's wholly-owned Sinosteel International Holding under the condition of anonymity.

The magazine said the company's shipping businesses is also questionable. Sinosteel consigned 80 percent of its freight cargo businesses in recent years to two small Hong Kong-registered shipping firms, the magazine reported.