Wang Gui, a former member of the Party Leadership Group, Deputy Director and First-level Inspector of the Guizhou Provincial Department of Finance, was expelled from the Party and was notified that he had “invested in shares and run businesses in violation of regulations”; the former Deputy Secretary and Vice Chairman of the Party Committee of Hunan Xiangke Holding Group Co., Ltd. , deputy general manager Chen Jiming was expelled from the party, and the report stated that he "'hidden shares' illegally owned shares of unlisted companies"... Recently, in the notifications of discipline inspection and supervision agencies at all levels, illegal investment and shareholding issues have frequently appeared.
The Third Plenary Session of the 20th Central Commission for Discipline Inspection called for “continuous efforts and in-depth advancement of the anti-corruption struggle” and “making severe punishment of corruption involving political and business collusion a top priority.”
At present, what are the specific manifestations of illegal investment and shareholding, and what new trends are emerging?
How to determine whether leading cadres’ stock buying and selling violates regulations?
How to correct illegal investment and shareholding issues?
Reporters conducted interviews and reports.
The methods are concealed and disguised, and there are frequent problems with illegal investment and shareholding by leading cadres.
In March 2023, Tang Zhaoping, the former party secretary and director of the Agricultural Bureau of Huaihua City, Hunan Province, who had retired for several years, was subject to review and investigation. In June of the same year, he was expelled from the party. He was notified that he "hiddenly participated in real estate development projects managed by capital units and acted as a 'shadow' 'shareholder".
The project is located in the office and dormitory area of the secondary public institution of the former Agricultural Bureau of Huaihua City. It was planned and constructed in 2013.
Tang Zhaoping believed that the targeted development of the project was a sure profit, so he became a "shadow" shareholder.
Tang Zhaoping transferred the funds to his cousin Yang and invested in shares in his name. He also formed a project department with his friend Chen, his wife's uncle Deng, and Chen's fellow villager Wang to develop the relevant land, and he lived in seclusion behind the scenes to act as a "trader." ".
During this period, due to the inability to pay the land transfer fee in full, the project once faced the risk of being "unfinished".
Tang Zhaoping ignored the objections of his team members and advanced the unit's purchase price of more than 20 million yuan to the developer more than a year in advance to solve the problem of unpaid land transfer fees.
In 2015, Tang Zhaoping stepped down to the second line, but he was still "confident" about the project and took the initiative to apply to continue to be responsible for the follow-up work.
In fact, he couldn't trust his investment.
After investigation, Tang Zhaoping invested in the project in the name of Yang from 2013 to 2018, investing more than 13 million yuan to account for 25% of the shares. As of the incident, the principal has been basically recovered, and dividends have not yet been settled.
Tang Zhaoping used his authority to facilitate the allocation of funds and the processing of warrants for the project, and worked with others to receive 4.2 million yuan in "hard work fees" and "intermediary fees".
Tang Zhaoping's illegal income was confiscated, and his suspected criminal issues were transferred to the procuratorate for review and prosecution in accordance with the law.
In recent years, individual party members and cadres have sought private interests in a covert manner in the name of individuals, relatives, friends, or people with special connections, under the guise of investing in shares, and under the guise of income such as dividends and interest collection.
In January 2024, Deng Jianhua, former Party Secretary and Director of the Chenzhou Supervision Bureau of the China Banking and Insurance Regulatory Commission, was sentenced to four and a half years in prison in the first instance.
The Hunan Provincial Commission for Discipline Inspection and Supervision reported that while Deng Jianhua was serving as Party Committee Secretary and Director of the Yongzhou, Shaoyang, and Chenzhou Banking and Insurance Regulatory Bureaus, he invested 3.9796 million yuan in the names of fellow countryman Deng Moumou and cousin-in-law Peng Moumou in 2 rural commercial banks and 1 rural commercial bank. Rural banks made illegal profits of more than 1.79 million yuan.
Deng Jianhua said in his confession that in recent years, the former China Banking and Insurance Regulatory Commission has issued many management measures to regulate the investment and financing behavior of system personnel, which clearly stipulates that investment is not allowed, including holding shares in rural commercial banks and rural banks on behalf of others. As the director of the branch, Deng Jianhua said in his confession that Taking the lead in violating regulations, he invested in shares in the name of others, repeatedly reported that he had zero holdings, and designed false transfers with traces of idling funds to avoid organizational spot checks and conceal the truth.
“From the investigation and handling of cases, the more common illegal investment and shareholding behaviors of party members and cadres mainly include investment, dry stock, holding and other specific types.” Xiang Jianjun, a member of the Supervisory Committee of Kaihua County, Zhejiang Province, introduced that the investment type refers to individuals, Close relatives or persons with specific relationships invest in industries and fields that are related to their authority, such as investing in and investing in companies run by management and service recipients, projects managed by themselves, etc.; dry shares are those who use their authority to invest in dry shares to participate in regular dividends. Such situations are mainly concentrated in capital project-intensive industries; holding such situations means owning shares or securities of unlisted companies and other illegal investment behaviors.
Chen Qiao, deputy director of the Second Discipline Inspection and Supervision Office of the Binjiang District Commission for Discipline Inspection and Supervision of Hangzhou City, Zhejiang Province, said that according to the holding method, illegal investment and shareholding can be divided into direct holding and holding on behalf of others; according to the investment method, it can be divided into actual investment and power Realization; according to the time of investment, it can be divided into immediate investment and option investment.
"The means are concealed, highly disguised, and the amount is relatively large." Wang Jianxiong, deputy director of the Fourth Discipline Inspection and Supervision Office of the Yuhang District Commission for Discipline Inspection and Supervision of Hangzhou City, said that illegal investment by leading cadres often borrows the names of family members, relatives, friends, etc., through anonymous Agent holdings, multiple layers of nesting, and long-term returns avoid supervision or investigation.
Yang Hai, a professor at the School of Marxism at North China Electric Power University, said that illegal investment and shareholding by leading cadres violates official integrity, erodes the healthy body of the party, disrupts normal market competition order, and undermines social fairness and justice. It is necessary to maintain a high-pressure posture of punishment and resolutely crack down on severe rectification.
Relevant party discipline laws and regulations clearly stipulate the behavior of party members and cadres in buying and selling stocks and securities investments.
As a kind of commercial activity, stock trading itself has a profit-making nature.
In October 1993, under the historical conditions when the national securities market regulatory mechanism was not sound enough, the Party Central Committee and the State Council issued regulations prohibiting leading cadres at the county (division) level and above in party and government agencies from buying and selling stocks.
With the gradual improvement of my country's securities industry regulatory system, especially the promulgation and implementation of the Securities Law of the People's Republic of China, securities market management has become more and more standardized.
In April 2001, the Party Central Committee and the State Council decided to relax the regulations on stock trading for leading cadres at or above the county (division) level of party and government organs with restrictions, and issued the "Several Provisions on the Personal Securities Investment Behavior of Party and Government Organ Staff."
As the current main policy basis for regulating the securities investment behavior of party and government staff, Article 3 of the "Several Provisions on the Personal Securities Investment Behavior of Party and Government Staff" clearly states: "Individual staff of party and government agencies may buy and sell stocks and securities investment funds. When buying and selling stocks and securities investment funds, you must abide by relevant laws and regulations, and the following behaviors are strictly prohibited: (1) Taking advantage of the influence of your authority or position or using other improper means to solicit or forcibly buy or sell stocks, solicit or resell stock options (2) Using inside information to directly or indirectly buy and sell stocks and securities investment funds, or making suggestions to others for buying and selling stocks and securities investment funds; (3) Buying and selling, or holding or buying and selling in the name of others within the scope of its direct business jurisdiction Stocks of listed companies; (4) Borrow the public funds of the unit, or borrow the funds of management and service objects, or borrow the funds of subordinate units and individuals within the scope of management, or borrow the funds of other units and individuals related to the exercise of their powers. , purchase stocks and securities investment funds; (5) raise funds to buy and sell stocks and securities investment funds in the name of the unit; (6) use working hours and office facilities to buy and sell stocks and securities investment funds; (7) other violations of the "Securities Law of the People's Republic of China" and relevant laws and regulations." The "Regulations" also clarify that several categories of personnel, including staff of party and government agencies who possess inside information, are not allowed to buy or sell stocks.
Article 103 of the newly revised "Regulations on Disciplinary Punishments of the Communist Party of China" will violate relevant regulations when operating a business, owning shares or securities of unlisted companies (enterprises), buying and selling stocks or making other securities investments, engaging in paid intermediary activities, doing business in the country (border) ), or investing in shares outside the country, or engaging in other profit-making activities in violation of relevant regulations, are classified as violations of integrity and discipline, and it is expressly prohibited to use the information obtained while participating in corporate restructuring, private placement, merger investment, land use rights transfer, etc. to trade stock.
The Supreme People's Court and the Supreme People's Procuratorate's "Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Bribery" stipulates on the issue of accepting dry shares: "Dry shares refer to shares obtained without capital contribution. State functionaries use the convenience of their positions to request entrustments Anyone who seeks benefits from others and accepts shares provided by the petitioner shall be punished as accepting bribes. If the equity transfer is registered, or relevant evidence proves that the shares have actually been transferred, the amount of bribes accepted shall be calculated based on the value of the shares at the time of the transfer, and the dividends shall be calculated based on the value of the shares at the time of the transfer. Interest treatment. If the shares are not actually transferred and benefits are obtained in the name of share dividends, the actual amount of profit should be deemed as the amount of bribery."
The "Opinions" also stipulates the issue of accepting bribes in the name of entrusting the trustee to invest in securities, futures or other entrusted financial management: "State staff use the convenience of their positions to seek benefits for the entrusted person, and entrust the entrusted person to invest in securities, futures or other financial services." If, in the name of entrusted financial management, one obtains 'returns' without actually making an investment, or if one actually makes an investment, the 'returns' obtained are significantly higher than the return due from the investment, he will be punished as accepting bribes."
Pay close attention to the exercise and use of rights, and lift the veil of "marketization" and "legalization" that covers illegal investments and shareholdings
Zhu Haofeng, deputy director of the Second Discipline Inspection and Supervision Office of the Xiaoshan District Discipline Inspection Commission of Hangzhou City, analyzed that when investigating illegal investment and shareholding issues, attention should be paid to whether the investment and shareholding industry is related to the authority of leading cadres; whether leading cadres actually contribute capital, and those who receive dry shares usually do not contribute capital but Obtain shares, and the cooperative investment type accepts bribes in the name of cooperative investment. In practice, although there is actual capital contribution, the benefits are often conveyed in the form of repurchasing shares; what role does it play in the business process, and whether it takes advantage of the convenience of its position to benefit the cooperation Investors and investment projects are facilitated; whether dividends are actually distributed, etc.
In 2022, when the Xiaoshan District Discipline Inspection and Supervision Committee investigated the bribery case of Fang Weiguo, the chief engineer and production technology department manager of Hangzhou Xiaoshan Environmental Group Co., Ltd., it was discovered that he used his authority to represent Chen, the legal representative of an equipment company, in undertaking multiple water plant projects in the district. To provide convenience, Fang Weiguo asked Chen's company to provide him with dry stock dividends without actually making any capital contribution. Fang Weiguo received a total of 250,000 yuan in dry stock dividends from Chen.
Fang Weiguo was expelled from the party and sentenced to three years and three months in prison for accepting bribes and fined 400,000 yuan.
Yang Ronghua, director of the Second Discipline Inspection and Supervision Office of the Fuyang District Commission for Discipline Inspection and Supervision of Hangzhou City, said that the key to investigating illegal investment and shareholding issues is to find out: first, the relationship between the equity holders and leading cadres. By finding out the actual work and employment of the equity holders, Relevant capital flows, relevant agreement materials, etc., to clarify whether there is an agency holding relationship; second, the relationship between leading cadres and the company involved and relevant responsible persons, find out the reasons for the leading cadres’ participation in the shares, the method of taking shares, the method of equity allocation, and the relationship with the company involved Whether there is room for job convenience and profit-making; the third is the relationship between equity dividends and risk-taking. Find out the volume and distribution relationship of dividend funds, determine whether leading cadres only enjoy dividend rights and do not bear risks and losses, and whether the dividend returns exceed Normal standard range, etc.
"Many hidden variations of corrupt behaviors are essentially tools and pretense used by perpetrators to cover up transactions of power and money. We must look at the essence through the phenomenon, pay close attention to the exercise and use of power, and find out whether there is any use of power or influence to engage in power rent-seeking. , the behavior of realizing power, and lifting the veil of 'marketization' and 'legalization' that covers illegal investment and shareholding." Yang Ronghua said.
"In order to cover up their disciplinary and illegal issues, the parties involved mostly purchased shares in the name of family members, relatives, friends, etc. of the leading cadres, and the shareholding ratio, amount of capital contribution, return method, etc. are usually just oral agreements between the shareholders and the boss." Wang Jianxiong analyzed. , in the process of investigating and handling cases, in addition to the oral confessions of leading cadres who have invested in shares and the owners of relevant companies, the investigation of specific related persons is crucial. By sorting out personal relationships, capital flows, etc., core personnel can be identified as a breakthrough point.
Strengthen the supervision of the education and management of party members and cadres, and promote the overall improvement of governance efficiency
In response to the problem of illegal investment and shareholding by leading cadres, the disciplinary inspection and supervision agencies have continued to maintain a high-pressure posture in punishing corruption. Those who do not restrain themselves, do not hold back, or go against the trend of illegal investment and shareholding will be dealt with strictly in accordance with regulations, disciplines and laws. They will make good use of cases to promote reform and use cases to promote reform. We will strengthen the role of cases in promoting treatment, strengthen education management supervision, and strive to promote the overall improvement of governance efficiency.
Closely focus on corruption issues and use case investigation as a breakthrough to promote the formation of "punishment" as a deterrent.
Commissions for Discipline Inspection and Supervision at all levels have conducted in-depth rectification of illegal investment and shareholding issues by leading cadres, discovered and investigated clues to relevant issues, reported relevant cases in a concentrated manner, and continued to send strict signals.
Deepen the special treatment of illegal investment and shareholding by leading cadres.
The Discipline Inspection and Supervision Commissions of Changle, Fujian, Kaihua, Zhejiang and other places have deepened the special treatment of illegal investment and shareholding by party members and cadres, and included illegal business operations and illegal ownership of shares or securities of unlisted companies (enterprises) into the scope of governance, through self-examination, verification and promotion of cadres rectification, etc., to comprehensively investigate the illegal investment and shareholding of local party members and cadres; in response to the problems discovered in the special governance, improve the relevant systems and regulations, and standardize the clean and honest political behavior of leading cadres.
Efforts should be made to form a joint force of supervision.
In response to the problems of buying shares in the name of relatives and friends, and conducting power-for-money transactions through holding shares on behalf of others, the Xiaoshan District Discipline Inspection and Supervision Committee strengthened communication and cooperation with the organization, market supervision, taxation, auditing and other departments, and used big data supervision and other means to promptly discover leaders. Clues to problems related to illegal investment and shareholding by cadres.
Carry out targeted warning education.
After the Deng Jianhua case occurred, the Chenzhou Municipal Commission for Discipline Inspection and Supervision concentrated on sorting out cases of illegal investment and shareholding, and carried out warning education by compiling confessions and filming warning education films.
The Kaihua County Commission for Discipline Inspection and Supervision has comprehensively sorted out the illegal investment and shareholding cases of leading cadres investigated and dealt with in recent years, incorporated them into the course content of the anti-corruption party, carried out warning education in the units where the cases occurred and key units, and urged party members and cadres to deeply understand the harm of illegal investment and shareholding, and consciously abide by integrity and self-discipline Various regulations, truthful reporting of personal-related matters, and strengthening education and restraint on individuals, spouses, children, spouses and other relatives.
Establish and improve long-term mechanisms for rectification.
The Commission for Discipline Inspection and Supervision in Jiande, Zhejiang, Chenzhou, Hunan and other places make good use of anti-corruption files, strictly enforce the reporting system for personal-related matters, increase random inspections and verifications, and standardize the behavior of spouses, children and close relatives of leading cadres in investing in shares, running businesses, and participating in capital lending. , and continue to achieve more institutional results and greater governance effectiveness.
(China Discipline Inspection and Supervision Reporter Han Yadong)