The State Tobacco Monopoly Administration (STMA) of China has closed all the representative offices of provincial tobacco bureaus and companies in Beijing after the offices were revealed to be serving as high-end clubs to treat officials.
Representative offices in Beijing are government agencies approved by the National Government Offices Administration.
At the end of 2015, a total of 44 provincial tobacco bureaus and companies had opened 53 representative offices, stability maintenance offices and marketing offices in Beijing, according to an article published in China Discipline Inspection, a magazine run by the Central Commission for Discipline Inspection (CCDI) of the Communist Party of China (CPC), on Thursday.
The STMA announced the closure of all 53 offices at a meeting on April 13, according to the article.
"Representative offices appeared in the early period of reform and opening-up. In that time, because the market wasn't very developed, the government had to play more roles which are normally played by the market," said Su Wei, a professor at the Party School of the CPC Chongqing Municipal Committee.
To lobby for policies and authorizations from the central government, local governments and enterprises had to open offices in Beijing to keep ties with the decision-making sectors, which was reasonable in that era, Su told the Global Times.
"However, with the development of the market economy, the government started to streamline the administration and delegate powers to the market, so these offices are not as necessary as before, and they also provided an opportunity for corruption. Many representative offices are just like luxury hotels for entertainment," he added.
The report said that many of the offices are located in high-grade residential districts and office buildings and some are luxuriously appointed, with karaoke and sauna rooms.
The tobacco bureau of Northeast China's Heilongjiang Province spent over 10 million yuan (.5 million) in 2012 and 2013 on purchasing four villas in Beijing, the article said.