Beijing strengthens financial crime laws

PUBLISHED : Friday, 30 June, 2006, 12:00am
UPDATED : Friday, 30 June, 2006, 12:00am

Executives who siphon off money could now be imprisoned for seven years

Under a raft of changes to the mainland's Criminal Law adopted yesterday, executives of mainland-listed companies face up to seven years in prison if they hollow out their firm's assets.

National People's Congress Standing Committee members also endorsed changes to the Compulsory Education Law which will increase funding from September to guarantee nine years of mandatory education for rural children.

Lang Sheng , director of the criminal law office under the Standing Committee's legal work committee, said the revisions expanded the definition of economic crimes to cover activities that undermined financial markets and company administration.

Under the widened list of offences, a listed company's board, supervisor or senior executives could spend up to seven years in prison for five major offences, including siphoning off assets.

'This regulation is to maintain the market economy order, safeguard the interests of investors and establish a trustworthy socialist market economy,' Mr Lang said.

He said the definitions of the illegal activity were broad because it was impossible to regulate all kinds of economic behaviour.

'In law enforcement, the judiciary should strictly examine the inherent features of the crime's definition and make judgments and sentences based on the specific situations. Therefore, there should not be any abuse of the clauses,' Mr Lang said.

Other economic offences to be covered include swindling loans and credit from financial institutions, bankruptcy fraud, and violating obligations and duties in the management of client assets.

The Standing Committee also endorsed higher penalties for a number of economic crimes - including fines of up to 3 million yuan for manipulating the securities or futures markets - to bring the legislation in line with the revised Securities Law.

Mr Lang said the amendments added details to the financial and economic laws to strengthen implementation of the rules.

The changes also make legal representatives and employers legally responsible for serious workplace accidents. And employers will face tougher punishment for forcing workers to work illegally and neglecting safety.

Falsifying or not reporting workplace accidents, resulting in delayed emergency responses, will be regarded as a crime.

The revised Criminal Law did not adopt a clause on the issue of selective abortion.

According to Xinhua, some NPC delegates said the concept of preferring boys to girls was deeply rooted in some rural areas and the attitude would not be changed through legislative means.

The session also discussed the draft Anti-Monopoly Law and Emergency Management Law.

Commenting on a clause in the draft Emergency Management Law that would impose fines on news outlets for running reports on public emergencies without permission, Kan Ke , the director-general of the Standing Committee's Information Bureau, said: 'It is based on our years of experience, and it is compatible with our practice. Its aim is to provide service and convenience for reporters to report emergencies.'