Former director of State-owned Assets Supervision and Administration Commission receives prison sentence
October 12 – JIANG Jiemin, the former director of the State-owned Assets Supervision and Administration Commission of the State Council (“SASAC”) who was responsible for managing and supervising SOEs and state-owned assets, pleaded guilty to accepting bribes and was sentenced by the Hanjiang Intermediate Court of the Hubei province to 16 years imprisonment. Proper ty valued at CNY 1,000,000 was also confiscated. JIANG has said that he will not appeal the judgment.
Central Inspection Team focused on aviation, railway and financial sectors
October 22 – The Central Inspection Team of the Chinese Communist Party’s Central Commission for Disciplinary Inspection (“CCDI”) completed the second round of inspections for 2015 which focused on 26 central units and SOEs from various industries including aviation, transportation, manufacturing and others. It reported that serious corruption issues had been identified within China Railway Corporation, as well as within the civil aviation industry. In respect of the latter, it discovered that a director of a major SOE civil aviation company had established his own company to compete against the SOE civil aviation company. The official report can be found on the CCDI website.
October 23 – The Central Inspection Team began its third round of inspection for 2015 which focuses on 31 central units and SOEs and on key players in the financial sector, such as financial regulatory organizations, major banks, and insurance companies. The Shanghai Stock Exchange and Shenzhen Stock Exchange have been listed for inspection.
A full list of the companies and agencies under inspection for the third round can be found on the CCDI website. These inspections are ongoing.
Non-executive director of a Hong Kong-listed pharmaceutical company charged with corruption
November 27 – A non-executive director of a Hong Kong-listed pharmaceutical company was arrested by the Independent Commission Against Corruption of Hong Kong for potential corruption charges, but was later released without charge. The arrest comes in the context of the company’s suspension from trading on the Hong Kong Stock Exchange (“HKEx”) on March 27, 2015 for failing to disclose cer tain information in its annual repor t. The company’s Audit Committee began investigating several allegations made against the company, including alleged inflation of sales prices, inappropriate payments to distributors, and bribery conduct. The HKEx has required that an independent forensic investigation be conducted, and that the company publish adequate financial repor ts. The company must satisfy these requirements before it can resume trading.
China stock market continues to be a focus for potential bribery crackdown
November 13 – YAO Gang, the former vice chairman of the China Securities Regulatory Commission (“CSRC”), is being investigated for suspected serious violations of party discipline – which is a standard phrase that refers to potential corruption allegations. YAO was one of CSRC’s most senior officials in charge of approving initial public offerings.
November 26 – Three major Chinese securities investment firms and their senior executives are being formally investigated by the CSRC for allegedly manipulating stock prices and engaging in insider trading. Several media sources have reported that FU Zhenghua, the Deputy Minister of Public Security who brought down one of China’s top Communist Party officials, ZHOU Yongkang, has been put in charge of corruption and insider trading probes related to the securities industry in the wake of the stock market crash.
Repatriation of Chinese fugitive officials continues
December 10 – According to media reports, operation “Sky Net” has successfully repatriated 738 fugitives from over 68 foreign countries since its inception in April 2015. Under the “Sky Net” campaign, Chinese authorities collaborate with various law enforcement agencies around the world to repatriate alleged fugitive Chinese officials.
As of November 30, “Sky Net” successfully repatriated 18 of China’s most wanted Chinese fugitives from abroad, including HUANG Yurong, a former party director at the highway agency in Henan province. HUANG voluntarily returned to China after 13 years in the U.S. She was accused of accepting bribes and embezzling public funds. Her husband, former Henan transportation department chief, was sentenced to life imprisonment in 2005 for accepting bribes totaling CNY 19 million (approximately USD 3 million). HUANG was ranked No. 4 on China’s 100 most wanted list and she was also the highest ranking official among the 18 most wanted Chinese fugitives who had been repatriated.
“Sky Net” is a multi-agency operation involving the collaboration of four Chinese government entities: Organization Depar tment of the Communist Par ty of China’s Central Committee, Supreme People’s Procuratorate, Ministry of Public Security, and the People’s Bank of China.
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