Sentenced indefinite, highest prosecution case disclosed: executives of state-owned financial institutions bribed 105 million yuan in Yunnan | share | financial institutions
State owned financial institution executives abused their power and engaged in transactions using undisclosed information, accepting bribes of 105 million yuan, and were sentenced to life.
Punish and actively prevent job-related crimes in the financial sector in accordance with the law. On August 22, the Supreme People's Procuratorate issued the 47th batch of guiding cases, including the case of Sang's bribery, abuse of power by state-owned company personnel, and use of non-public information for trading.
Financial institution executives take advantage of their positions to bribe billions of dollars
The case shows that the defendant, Mr. Sang, male, was the former assistant to the president and general manager of the investment and investment banking business unit of Company A Asset Management Co., Ltd., and the former general manager and chairman of Company B Investment Management Co., Ltd. From 2009 to 2017, the defendant Sang took advantage of his position as the General Manager of the Investment Banking Department of Company A, the General Manager and Chairman of Company B, and provided assistance to relevant companies or individuals in corporate financing and other matters. He received more than 105 million yuan in equity and funds from the companies or individuals.
From 2015 to 2017, Sang took advantage of his position to provide assistance for a Quanzhou company controlled by Guo to shell out a Heilongjiang company for listing and obtain financing support from Company B. After the successful backdoor listing, the stock of a company in Heilongjiang was renamed as the stock of a company in Quanzhou.
In September 2016, Sang arranged for his friend Jiang and Guo to sign an equity return rights proxy agreement, agreeing that Guo would transfer 5 million shares of Quanzhou company's stock return rights to Jiang at a low price, which was 7.26 yuan per share, at the pre listing price. The agreement was valid for at least one year and the repurchase amount would be calculated at 10% off the average price of the 20 trading days before the exit date. Jiang would pay Guo 36.3 million yuan. In March 2017, the validity period of the agreement had not yet expired. Jiang saw that the market situation was good, so he signed an agreement with Guo, agreeing that Guo would repurchase the equity income right in advance, with a total repurchase price of 62 million yuan. From April to July of the same year, Guo transferred 62 million yuan to Jiang in two installments. Jiang actually benefited 25.7 million yuan and agreed to share it equally with Sang.
In June 2015, a fund project managed by Company B was established. Sang asked his friend Wen's Yunnan company to invest more than 161 million yuan as a lower tier fund. Later, 130 million yuan of the investment was transferred to Company B, leaving Yunnan company with a remaining 31.3255 million yuan of lower tier shares. In order to help a company in Yunnan transfer the remaining shares in advance for profit, in February 2018, Sang sought the help of Zhu to take over. At the same time, without the approval of the business decision-making committee and board of directors of Company B, Sang illegally arranged for Company B to issue a letter to Shanghai, which is actually controlled by Zhu, stating that he knew that Shanghai had invested 101 million yuan to purchase all the remaining inferior shares of Yunnan, and promised to distribute stocks in the future according to his contribution shares rather than fund shares.
In March 2018, a company in Shanghai invested 101 million yuan to undertake the inferior shares of a company in Yunnan. A company in Yunnan withdrew from the fund project earlier than Company B and made a profit of over 70 million yuan. Due to the early exit of a company in Yunnan, the floating income distribution rules stipulated in the distribution agreement for lower level partners and other documents were changed, resulting in differences in the annualized returns of fund shares. According to the accounting firm's calculation, Company B received a shortfall of 19.8699 million yuan in investment income.
From June 2015 to September 2016, Sang took advantage of his position to obtain undisclosed information on the names, trading times, trading prices, and other investment stocks of Company B and a fund securities account actually controlled by the company. According to the China Securities Regulatory Commission, the above information belongs to non-public information other than insider information. During this period, Sang violated relevant regulations and illegally profited 4.4166 million yuan by using the aforementioned undisclosed information to engage in related party convergence transactions between the company he controlled and securities accounts under the name of others.
Punished for multiple crimes and sentenced to life
According to the Supreme People's Procuratorate, this case was transferred for prosecution by the Beijing Municipal Supervision Commission after the investigation was concluded.
On March 3, 2020, the Second Branch of the Beijing People's Procuratorate filed a public prosecution in accordance with the law against Sang for the crime of bribery, the crime of using undisclosed information for trading, and the crime of abuse of power by personnel of state-owned companies. On August 27, 2021, the Beijing Second Intermediate People's Court made a first instance judgment, sentencing Sang to life imprisonment, depriving him of political rights for life, and confiscating all personal property for the crime of bribery; Convicted of the crime of using non-public information for trading, sentenced to three years in prison and fined RMB 4.5 million; Offense of abuse of power by personnel of state-owned companies, sentenced to five years in prison; Decision to execute life imprisonment, deprive of political rights for life, and impose confiscation of all personal property. After the first instance verdict, Sang appealed. The second instance ruling of the Beijing Higher People's Court rejected the appeal and upheld the original verdict.
The Supreme People's Procuratorate stated that the procuratorial organs have intervened in the review in advance based on the request of the supervisory organs, and have put forward specific supplementary opinions on the subjective intention of Sang and the determination of undisclosed information in the crime of using undisclosed information trading, comprehensively consolidating key evidence. During the review and prosecution stage, the procuratorial organs lawfully reviewed all the criminal facts and evidence related to Sang's involvement in the case. In response to the financial professional issues involved in bribery crimes, we consulted securities industry professionals and criminal law experts to understand the nature and transaction form of normal equity interest financing agreements, clarify the differences with the agreements involved in this case, and reveal that the agreements involved are a means of conveying benefits to both parties involved in bribery.
At the same time, in response to the issue of determining the amount of profits in the crime of using undisclosed information for trading, we listened to the opinions of securities exchanges and other institutions, and determined the comparison principle, trading amount, and profit calculation method of the "first in, first out" method for similar trading stocks, as well as the calculation formula for profit amount. Finally, based on the trading data provided by the Shanghai and Shenzhen stock exchanges, we determined that Sang had illegally profited a total of 4.4166 million yuan.
In the trial, targeted cross examination and defense were conducted in response to the opinions raised by the defendant and defense counsel that the equity interest financing agreement signed between Mr. Sang, Mr. Jiang, and Mr. Guo belongs to normal commercial investment, and the fund project involved did not cause public property damage.
When elaborating on the guiding significance of this case, the Supreme People's Procuratorate stated that in handling cases of bribery through investment and financing, it is necessary to comprehensively examine the background, methods, authenticity, risks, and whether the risks and benefits match the evidence of investment and financing, and judge whether it has the essential characteristics of bribery and power money transactions.
The Supreme People's Procuratorate pointed out that the scope of public property losses caused by dereliction of duty crimes includes state-owned units losing profits due to missing transaction opportunities, compressing profit margins, and transferring due rights and interests, resulting in losses of deserved but not obtained profits. The procuratorial organs should pay attention to examining whether the cause of losses is market factors or dereliction of duty, the violation and illegality of dereliction of duty, and whether there are elements of favoritism and fraud. The portion of expected revenue losses caused by dereliction of duty rather than market factors should generally be included in the scope of public property losses.
In addition, when handling securities and futures related criminal cases, for the determination of key elements such as insider information, the scope of undisclosed information, and the amount of profits from similar trading, the recognition opinions of professional institutions such as securities regulatory authorities and stock exchanges should generally be obtained, and the examination and judgment should be conducted in accordance with the law.
