China's National Audit Office has found irregularities at 11 state-owned conglomerates ranging from misrepresentation of assets to illegal property development, highlighting the challenges the government faces in overhauling the public sector. China National Petroleum Corp (CNPC), the parent of PetroChina Co Ltd , China Resources (Holdings) Co Ltd, the parent of 10 companies listed in Shanghai and Hong Kong, and defence contractor China South Industries Group Corp, were among the firms whose 2012 audit reports were released on Friday. China has been moving to overhaul its state-owned sector following last year's decision to diversify ownership to give equal political and legal status to state and private companies.