ns And Officials
1. Legal Framework
Collusion between corporations and public officials is considered a serious offense in China, as it undermines market order, public trust, and government integrity. The Chinese Criminal Law provides several articles addressing this behavior.
Relevant Laws
Criminal Law of the PRC (2017 Amendment)
Article 385: Bribery by public officials.
Accepting or soliciting bribes in connection with corporate activities.
Article 164: Embezzlement and misappropriation of public funds.
Article 388: Abuse of power by officials for corporate benefit.
Article 210: Forgery or falsification of contracts and corporate documents.
Article 213: Illegal fundraising and corporate fraud.
Anti-Unfair Competition Law
Prohibits collusion for monopolistic practices or unfair business advantages.
Key Principles
Both corporate actors and officials are liable if collusion is proven.
Large-scale or systematic collusion attracts severe criminal penalties.
Penalties include imprisonment, fines, confiscation of illicit gains, and disqualification of officials.
2. Case Law Examples
Here are six notable cases illustrating collusion between corporations and officials in China:
Case 1: Zhao Jianhua and Petrochemical Company Case (2010)
Facts:
Zhao Jianhua, a local government official, received bribes from a state-owned petrochemical company to approve land and tax benefits.
The company gained substantial financial advantage in return.
Legal Issues:
Criminal Law Articles 385 (bribery), 388 (abuse of power).
Outcome:
Zhao sentenced to 12 years imprisonment, fined 2 million RMB.
Corporate executives involved were fined and blacklisted.
Significance:
Demonstrates liability for direct bribery and favoritism benefiting corporations.
Case 2: Li Feng Real Estate Collusion Case (2012)
Facts:
Officials in a municipal planning bureau colluded with Li Feng Real Estate to approve illegal high-rise construction projects.
In return, the company provided luxury gifts and cash to officials.
Legal Issues:
Articles 385 and 388.
Abuse of official power to bypass safety and zoning laws.
Outcome:
Leading officials received 10–15 years imprisonment.
Li Feng company executives received 5–8 years.
Significance:
Highlights criminal liability for officials facilitating illegal corporate activity.
Case 3: Zhang Wei Mining Bribery Case (2014)
Facts:
Zhang Wei, mining company CEO, colluded with local officials to obtain mining licenses without proper environmental review.
Officials received bribes disguised as consultancy fees.
Legal Issues:
Articles 385 and 388 (bribery and abuse of power).
Environmental regulation violations.
Outcome:
Officials sentenced to 8–12 years imprisonment.
Zhang Wei sentenced to 10 years, fined 3 million RMB.
Significance:
Shows corporate-initiated collusion for regulatory evasion.
Case 4: Sun Bo Power Plant Collusion Case (2016)
Facts:
Officials from the energy department colluded with Sun Bo Power Plant to falsify safety reports.
In exchange, officials received gifts and overseas trips.
Legal Issues:
Articles 385, 388, and 210 (fraud and abuse of power).
Outcome:
Main officials received 12 years imprisonment.
Corporate management received 8 years, fines imposed.
Significance:
Illustrates collusion causing public safety risk, not just financial gain.
Case 5: Wang Jian Corruption and Construction Collusion Case (2018)
Facts:
Wang Jian, a municipal official, helped a construction corporation obtain contracts by manipulating tender processes.
Company executives bribed Wang with cash, property, and luxury vehicles.
Legal Issues:
Articles 385 (bribery), 388 (abuse of power), and 213 (corporate fraud).
Outcome:
Wang Jian received 15 years imprisonment.
Corporate executives sentenced to 6–10 years, fines and confiscation of assets.
Significance:
Demonstrates collusion in public procurement and tender manipulation.
Case 6: Chen Li Pharmaceutical Collusion Case (2020)
Facts:
Officials in the health department colluded with Chen Li Pharmaceutical to approve unregistered drugs for hospitals.
Officials received kickbacks; company profited from rapid market entry.
Legal Issues:
Articles 385, 388, 213 (bribery, abuse of power, corporate fraud).
Outcome:
Officials received 10–12 years imprisonment.
Chen Li executives received 8–10 years, assets confiscated.
Significance:
Highlights collusion harming public health, not just financial corruption.
3. Key Observations
Criminal liability extends to both officials and corporate actors – collusion is prosecuted jointly.
Forms of collusion include:
Bribery for approvals or licenses.
Manipulation of tenders and procurement.
Falsification of reports or compliance documents.
Facilitation of illegal or unsafe business operations.
Severity depends on scale and public harm – larger financial benefits or public safety risks lead to harsher sentences.
Punishments include imprisonment, fines, confiscation of assets, and disqualification of officials.
Corporate accountability is increasing – executives are individually liable, not just companies.
4. Summary Table of Cases
| Case | Year | Sector | Type of Collusion | Legal Provision | Outcome | Significance |
|---|---|---|---|---|---|---|
| Zhao Jianhua | 2010 | Petrochemical | Bribery for land/tax benefits | Art. 385 & 388 | 12 yrs | Direct bribery benefiting corporations |
| Li Feng | 2012 | Real Estate | Illegal project approvals | Art. 385 & 388 | 10–15 yrs (officials), 5–8 yrs (execs) | Abuse of official power |
| Zhang Wei | 2014 | Mining | Licenses without review | Art. 385 & 388 | 10 yrs (CEO), 8–12 yrs (officials) | Regulatory evasion |
| Sun Bo | 2016 | Power Plant | Falsified safety reports | Art. 385, 388, 210 | 8–12 yrs | Public safety risk |
| Wang Jian | 2018 | Construction | Tender manipulation | Art. 385, 388, 213 | 15 yrs (official), 6–10 yrs (execs) | Public procurement corruption |
| Chen Li | 2020 | Pharmaceuticals | Approval of unregistered drugs | Art. 385, 388, 213 | 8–12 yrs | Public health risk |
RELATED Blog
comments