On July 16, 2024, the People's Procuratorate of a district in Chongqing Municipality held a joint meeting on corporate compliance in accordance with the law, and initiated compliance rectification for Company A and Company B in accordance with the law. This is the fifth case in which the King&Capital team of lawyers Zhiguang Li, Luyue Zhang and Yu Ning practiced criminal compliance. Ms. Fan Yinghui from King&Capital, as the compliance counselor of Company A and Company B, participated in the meeting.
Basic Case
On June 29, 2023, three executives of Company A and Company B were criminally detained by a district branch of the Chongqing Public Security Bureau on suspicion of false invoicing. After accepting the commission, Li Zhiguang, Zhang Luyue, Ning Yu team of lawyers quickly went to Chongqing to start the work, met with the client several times during the detention period, and had in-depth communication with the case officers to fully understand the background and details of the case.
Based on the background and facts of the case, the three lawyers, taking into account the role of their clients in the case and the positive impact on the development of the company after the release on bail and awaiting trial, filed an application for non-approval of the arrest to the authorities of the case.2023 On August 4, the procuratorate, after giving full consideration to the opinions of the defense lawyers, made a decision of non-approval of the arrest of two of the suspects.
During the investigation stage, the two suspects actively cooperated with the public security authorities, explaining the background and reasons for the false invoices, and carried out self-examination and self-correction under the guidance of the tax authorities, and made corrective declarations on the use of false invoices to overstate the expenditures.
After the case was transferred for review and prosecution, the three lawyers analyzed the case in depth based on their past experience in initiating compliance, and concluded that the case met the conditions for initiating compliance rectification for the enterprises involved in the case. After consulting the enterprise involved in the case, they actively communicated with the Procuratorate and applied for initiating criminal compliance rectification for the enterprise involved in the case. Due to the complex background of the case and the large amount of money involved, the procuratorate was extremely cautious about the case, and held several meetings to discuss the case and reported it to the municipal procuratorate. Under the repeated application and communication of the defense lawyers, the municipal procuratorate finally agreed to the application for enterprise compliance rectification, and the district procuratorate then formed a third-party expert group and made a public announcement.
After a five-day publicity period, the expert group was formally established. The procuratorial authorities organized the third-party expert group, the actual controller of the company involved, the company's compliance consultant, and the defender to hold a joint meeting on compliance, and formally announced the initiation of compliance rectification for the company involved.
Lawyer Summary
In this case, the defense team assessed and determined that the case met the conditions for initiating corporate compliance rectification. However, due to the complex background of the case, the process of initiating compliance rectification was not easy. The team of lawyers needed to analyze the causes of the case in depth, prescribe the right remedy, put forward specific rectification plans and solutions, and persistently apply to the procuratorate to convey the enterprise's determination to comply, in order to eliminate the contractor's concerns and strive for the opportunity to initiate compliance rectification.
The case was able to successfully initiate compliance rectification, on the one hand, thanks to the active action and commitment of the procuratorial authorities in the process of handling the case, they insisted on punishing the crime and at the same time, assisting the development of the enterprise, formulating compliance rectification measures according to the specific circumstances of the case, and promoting the improvement of the governance mechanism of the private enterprise and enhancing the core competitiveness of the enterprise; on the other hand, also thanks to the professionalism and persistence of the defense team and the compliance team of King&Capital, they actively innovated and formulated specific plans and solutions according to the actual circumstances. They actively innovate, formulate compliance programs according to the actual situation, give full play to the dual effectiveness of criminal defense and compliance rectification of the enterprises involved in the case, and help private enterprises develop in accordance with the law, realizing a win-win situation in terms of legal effect and social and economic benefits.
