Crackdown on private sector graft enhanced

Courts nationwide have been urged to intensify the crackdown on corruption cases involving employees of private enterprises to help foster healthy development of the private sector.

On June 9, the Supreme People's Court, China's top court, released five corruption cases related to private enterprises, indicating the judiciary's determination to guarantee transaction security in the private sector, and strengthen the building of a sound business environment.

In one case, two former directors of a holding company in Chongqing were given heavy prison sentences after they were found to have accepted large bribes that caused significant losses for the enterprise.

One of the directors, surnamed Yan, served as the company's general manager responsible for its production and business operation. The other, surnamed Sun, liaised with financial institutions.

In 2014, a pharmaceutical company employee, surnamed Li, proposed a cooperation agreement with the Chongqing-based company. Li offered to pay Yan and Sun a commission equal to 5 percent of the financing amount in exchange for their assistance in facilitating the business partnership. Yan and Sun agreed to the arrangement and decided to split the commission equally.

During business operations, Yan and Sun knowingly approved Li's flawed receivables and even defended their actions in board meetings. In return, they accepted bribes totaling over 560 million yuan ($77.99 million) from December 2014 to April 2018.

The Jiulongpo District People's Court in Chongqing identified the acts of Yan and Sun as bribery, and said they should be held criminally liable for the offense. After a trial, the court sentenced Yan to 14 years and 10 months in prison, and Sun to 15 years.

The court ruled that each of them had 100 million yuan of their assets seized. Their 560 million yuan in illicit gains was also confiscated.

"Such punishment of the two individuals has sent a strong signal from Chinese courts about their firm stance on combating bribery among employees of private enterprises," the top court said.

Bian Guodong, a judge from Nanjing, Jiangsu province, emphasized that the handling of criminal cases had further clarified the need to apply uniform standards of judgment for corruption, regardless of whether the offenders are employees of State-owned enterprises or private companies.

Chinese courts should strictly and accurately apply the law to protect the rights and interests of market entities to alleviate their concerns about legal risks, he said.

"At the same time, judges also need to use judicial measures as a deterrent to maintain market order and provide stronger protection for lawful operators," he added.

In late April, the Standing Committee of the National People's Congress, China's top legislature, passed the country's first fundamental law focused on promoting the private economy, a significant step in the protection of a sector that is key to the country's high-quality development.

The law, which took effect on May 20, covers various areas such as fair competition, investment and financing promotion, scientific and technological innovation, regulatory guidance, service support, and legal liabilities. It aims to help the nation create a fairer, more dynamic business environment and address pressing concerns of the private sector.