Outbound bribery brings governmental punishments directly to a company, which appears hurting. However, inbound bribery (as well as some other internal frauds) is more harmful in terms of financial losses, which could be as much as 4% of the total revenue of a company.
In-bound bribery is more difficult to detect, so are other internal frauds such as embezzlements, conflict-of-interest transactions, which go hand to hand without exception. The internal frauds could remain “unseen” for a very long time until the time of the “broken arrow”. When that moment comes up, your breath could be taken away, which we can learn from the case study on FAW Group (i.e., the First Auto Work) – one of the earliest and biggest auto manufacturers in China.
The former chairman of the FAW Group, Mr. Xu, Jianyi, took bribes around RMB 12 million (approximately US$ 1.8 million) from the legal representative of a local Changchun transportation company. As a result, Mr. Xu was given a sentence of imprisonment of 11 years and 6 months. In addition, there are some other corruption and bribery cases in relation to FAW Group or its affiliated companies as the table below indicates:
|
Year of Conviction
|
Person
|
Company
|
Title
|
Crime
|
Term of Imprisonment
|
|
2017
|
Mr. Xu, Jianyi (徐建一)
|
FAW中国第一汽车集团公司
|
Chairman
|
Taking bribes of RMB12 million （US$ 1.8 million）
|
11.5 years
|
|
2016
|
Mr. An, Dewu (安德武)
|
FAW中国第一汽车集团公司
|
Deputy GM
|
Embezzling and taking bribes of 11 million (about US$
1.6 million)
|
14 years
|
|
2015
|
Mr. Zhang, Xiaojun (张晓军)
|
FAW Sales Company (一汽轿车销售公司)
|
GM
|
Case result not clear
|
|
FAW-VW Sales Co./Audi Division一汽-大众销售公司奥迪事业部
|
Executive Vice GM
|
|
2015
|
Mr. Zhou, Yongjiang (周勇江)
|
FAW-VW一汽大众汽车公司
|
Vice Chief Economist
|
Taking bribes of RMB 17 million (about US$ 2.5
million)
|
15 years
|
|
FAW-VW Sales Co., Ltd. 一汽大众销售公司
|
General Manager
|
|
2014
|
Mr. Shi, Tao (石涛)
|
FAW-VW Sales Co. 一汽大众销售公司
|
Vice Executive GM
|
Taking bribes of RMB 33 million (about US$ 4.85
million) and un-resourceful income of RMB 27 million (or USD 4 million)
|
Life
imprisonment
|
|
2014 (case disclosed)
|
Mr. Li, Wu (李武)
|
FAW-VW一汽大众汽车公司
|
Vice GM
|
Case result not clear
|
|
FAW-VW Sales Co., Ltd. 一汽大众销售公司
|
GM
|
|
2014 (case disclosed)
|
Mr. Zhou, Chun （周纯）
|
FAW-VW/Audi Sales Division一汽大众汽车公司奥迪销售事业部
|
Vice GM
|
|
2013
|
Mr. Xiong, Guosong (熊国松)
|
FAW-VW Sales Co., Ltd. 一汽大众销售公司
|
Deputy GM
|
Taking bribes of RMB 90 million（about US$ 13 million）
|
Death penalty with 2-year suspension
|
The checklist is not exhaustive. There are some other cases which are less significant than the ones provided in the table. We will talk more about the subject matter in the future.
Licensed to practice law in China and the New York State of the USA., Henry Chen is a senior partner of Beijing Dacheng Law Offices, LLP (Shanghai) (AKA Dentons Shanghai Office). Henry was the former AP Compliance Director of Ford Motor Company. Henry is the author of Risk Management of Commercial Bribery in China. Henry is available at Henry.chen@dentons.cn
