Protection of private sector highlighted

Efforts in response to govt's call to create better business environment

China's top procuratorate and top court have pledged to intensify efforts to strengthen the legal protection of the rights of private companies, and improve their internal management, to curb crimes at the source.

The Supreme People's Procuratorate held its 42nd opening day on Monday and called for the equal protection of market players, and the creation of a properly regulated business environment.

It also issued a guideline on punishing and preventing company insiders from infringing on the rights and interests of private companies.

Zhang Xiaojin, head of the SPP's fourth procuratorial office, said that the guideline is an important measure for implementing central government policies to promote the development and growth of the private economy, actively respond to the concerns of entrepreneurs, and protect the legitimate rights and interests of private companies.

On July 19, the Communist Party of China Central Committee and the State Council issued a document on boosting the growth of the private economy, promising to improve the business environment, and enhance policy support and legal guarantees.

Additionally, the general office of the State Council released a notice on July 28 on investigating problems hindering the development and expansion of the private economy.

The SPP's guideline tasks prosecutors with suggesting harsher punishments for private company employees involved in embezzlement, bribery and other forms of corruption. Prosecutors should apply a recovery mechanism for the property involved in the case to minimize losses to the company.

Prosecutors should also encourage governance of corruption at the source to both punish and prevent insider crimes, including the abuse of position to engage in acts such as operating parallel companies to the ones they work for, and the unauthorized sale of company assets.

Zhang said that prosecutors have found that using criminal means to intervene in economic disputes, such as the illegal seizure and freezing of the property of private companies, and maintaining normal production and operation of private companies involved in crime, are prominent problems encountered during case handling.

A series of measures have been introduced in recent years to protect the rights and interests of private companies facing the two problems, but insufficient attention has been paid to crimes committed by company insiders, Zhang said.

"Private company insiders, especially employees in key positions such as senior executives, and those working in finance, procurement, sales and technology who infringe upon the rights and interests of private companies, are not punished promptly and effectively," he added.

The handling of cases shows that problems such as an imperfect corporate management system, chaotic financial management, the lack of internal prevention mechanisms, and employees with poor legal awareness are behind insider crime and even directly affect the investigation and collection of evidence, he said.

The guideline called for prosecutors to help companies identify shortcomings and close loopholes to develop a modern management system. The SPP and the Supreme People's Court will formulate judicial interpretations of the laws applicable to the handling of criminal cases involving bribery and embezzlement by people other than civil servants, and clarify the standards on the application of the law in such cases.

Liu Guixiang, a member of the adjudication committee of the Supreme People's Court, said that during the execution of cases involving companies, the court will guarantee that the successful party realizes their rights in a timely manner, while minimizing impact on normal operations.

The court also takes a prudent attitude, and prohibits the seizure and freezing of property involved in excess of that required by law, to create a better legal environment for the sustainable and healthy development of the private economy, he said.

Fu Jinlian, deputy head of the No 2 Civil Division with the SPC, said that when handling cases where company insiders are suspected of crimes, the court will crack down on the criminal act, while reducing the negative impact on companies resulting from the detention of the employees involved, as much as possible.

"The court will also help companies plug management loopholes, and resolve risks and hidden dangers to promote healthy development," she said.