China Securities Company Offense Report

This assignment analyzes a Memorandum of Advice issued to the China Securities company detailing various offenses committed within the organization and proposing remedies. The report delves into procedural and evidential issues, emphasizing the role of arbitration as an alternative dispute resolution mechanism. It also touches upon relevant legal principles and international investment law.

Chinese Finance and
Investment Law

Table of Contents
MEMORANDUM OF ADVICE.....................................................................................................1
Introduction.................................................................................................................................1
Summary Of Advice...................................................................................................................1
Causes of Action/offences...........................................................................................................2
Defence.......................................................................................................................................5
Remedies.....................................................................................................................................6
Advice on specific issues of law:................................................................................................7
Procedural and Evidential Issues................................................................................................7
Conclusion...................................................................................................................................8
REFERENCES ...............................................................................................................................9

MEMORANDUM OF ADVICE
To: “China Security finance Ltd”
Introduction
Finance is an utmost important aspects which would be helpful for the companies to
organise their resources in more effective manner. It has been found that without having proper
sources of capital company cannot be able to survive for longer period of time. The document
would consists of various objectives that are responsible for analysing all those legal laws and
regulations which are making impact on their profitability (Song, George and Chen, 2018). The
project provide proper analysis of various law those are associated with risk management,
compliance and governance on Chinese businesses. It involve in financial sectors with a
particular aspects which is being considered as liability and viability of civil actions for
evaluating compensation.
Summary Of Advice
There are some essential aspects like legal structure, norms, terms and conditions in
respect of Chinese finance law defined in in summary advice of China Securities finance
corporation Limited (CSFCL). Financial institution specialisation in securities institutions are
governed and organised by Shanghai stock exchange, Shenzhen stock exchange and china
securities depositary and clearing corporation limited (Lu and Sun, 2013). Risk management and
corporate governance in Chinese financial market is implemented and followed properly and
consciously. There is an analysis of law which remain associated with risk management,
compliance and governance in Chinese business and financial institutions.
Basics laws which are followed and implemented on Chinese financial market and
corporations are defined in memorandum of Advice of China Securities Finance Corporation
Limited. There are some laws such as Corporate Law (2013), Securities Law (2014), Criminal
Law Amendment act (9) (2015), law on the state owed assets of enterprise (2008) and
Accounting Law (1999) are discussed. there are some essential aspects are defined in respect of
administration law. Regulations on the administration of company registration (2005).
In china financial institutions are based around basic law and administration regulations.
Rules and regulations in terms of financial institutions stem from both administrative regulatory
agencies overseeing financial intermediated also elaborated such as CBRC, CIRC, CSRC.
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Articles 1 and 2 of basic laws and administrative regulations are also defined subject to
guidelines and norms. Sources to determine liabilities, regulations and rules uses an article to
point to basic law. Company law, Tort Law/GPCL are the main sources to form basic law.
Legislation, rules and guidelines are made subject to corporate governance in China- specific
departmental administrative rules. These rules are as follows
CBRC
 there are some specific guidelines regarding corporate governance which remain
associated with supervision and administration over state owned commercial banks
(2006).
 Corporate governance of incorporated foreign funded banks (2005) covers the rules
related to foreign transfer and funds related to international transactions.
 Guidelines subject to governance of trust companies (2007)
PBOC
 This contains rules related to corporate governance of joint stock commercial banks
(2002).
Main source of instruction subject to liability are taken from Company Law (2013).
Chapter XII of Company law contains legislation and control in respect of provision for liability.
Article 214 and 215 subject to adjustment and appropriation of corporate liabilities are included
in memorandum of advice of China Securities Finance Corporation Limited. Liability and civil
actions subject to Tort in China also included. Regarding risk management and control in China
banking supervision law (2006) discussed.
Causes of Action/offences
There are various aspects which are related to deal with certain issues of liabilities,
whether criminal. regulatory and civil. This segment is valuable to make proper identification of
various cause and offences in order to determine all legal components are being present on
certain facts (Law, Azman-Saini and Ibrahim, 2013). It has been found that there are various
regulatory provisions and legal aspects associated to corporate or business fraud. In china,
deceptive organisational practices can constitutes as offences under criminal law1997.
Administration offences under anti-unfair competition act 1993 and securities law are needed to
be implemented within an organisation.
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However, some regulation which require to be followed in china securities Ltd. They
have issued compulsory set of standards as professional regulations. In addition to this, there are
certain aspects those are related with main issues about liability to main source of instruction
which comes either directly from company law (2013). According to chapter Xii, some
specifically considered legal obligations.
As per the mention article 214, in china securities finance Ltd violates any provision of
this particular laws, it shall have to bear the respective civil debt obligations of compensation and
need to pay the respective fines and pecuniary penalties (Yackee, 2012). In case, property is not
enough to pay for all the obligation, it would be pay for the civil debts initially. Henceforth, 2013
company law setup clear avenues for the initiation of civil actions in respect to compensation.
China Tort law:
A tort is basically determine in china as a offense of a civil wrong but they have no any
specific definition. It is act or omission which is unlawfully invades all property rights a person
of one another (Corkin, 2012). Tort law of Delict is more uniquely formulated in china. It is
happens to be a unique hybrid of civil and common legal laws which would be helpful in
addressing various issues related with the company financial positions (Dolzer and Schreuer,
2012). China has been addressed their tort as per the mentioned civil code under 1986. In case of
common legal tradition, in 2009 tort law of PRC establishes in various types of particular tort
which are more similar to a common legal system.
In china, a tort has mainly 4 components those are associated with financial system of china
security:
 Offence: According to section(5), of commercial law which is being established in
various criminal fraud offences. It would consider, unlawfully raising capital which is
being fraud for the purpose of illegal possession. Defrauding a bank or any other
financial institution through inventing false reason in order to obtain funds from
international markets (Article 193).
 Contract fraud: According to article 224, prohibition of defrauding contractual aspects
which are related with counterparties through signing a legal agreement in the name of
fictitious units. Invalidate negotiable instruments or any other wrong instruments.
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 Bid rigging: Under the mentioned article 223, a criminalises serious cases of such kind
of crimes are seen which consists of a conspiracy between bidder or among the tenderer
to offer quotes to impacts of state, a collective.
 False advertising: According to article 222, making any false advertising would commit
violation of state regulations. In this respects, the advertising law would be turn as one of
the great aspects which is associated with misleading consumers with providing
confusing content.
In case a tort liabilities is established, it is the primary responsibility of defendant to take
particular forms of remedy that can protect them form any misleading activities.
Corporate governance: it is known as perfect system of rules and processes through
which a company is directed has been controlled (Wenbin and Wilkes, 2012). It consists of
proper balancing interest of various stakeholders. In this term, Chinese law present so many
ways under which tort liabilities can be established in case there is any harm in particular areas
of inter alias.
 Right of shareholders: They have to right to take participation in companies overall
profitability as long they are owners of shares.
 Effective corporate governance design: It is more tough task to frame effective
corporate governance because the entire focus is provided on controlling overall business
risk.
 Equitable treatment of shareholder: Every shareholder would have great opportunities
in order to obtain effective redress for violation of their rights.
There are some other aspects those are needed to be taken into consideration. Some of
them discuss underneath:
 Recognize stakeholders rights
 Disclosure and transparency
 Clear role and responsibilities of board members.
Compliance: It is known as a definite set of property of undergoing deformation or
modification in total volume during a subject to an applied forces. The company is always acted
in compliance with administrative laws.
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Defence
Defence is the term which is used by the plaintiff or defender party to get them save from
various allegation. Defence are the main tool which are used by the defenders for getting them
salve from various allegations (La Croix, 2016). However, organisations are required to make
certain tools that could ultimately help out to render an effective organisation effectively. There
are various general or legal actions that could be taken in order to save defenders from various
prosecutions. However, this is the main tool which could be implemented by applying these tools
in an effective manner. However, this can be said that the general defences are used to mitigate
the criminal liabilities. Hereunder there are some justified defences in the insider trading cases if
inside information do not cause of execution of the trade, like as where:
 Individual, company or other firms, individually or in aggregate together with others by
these agreement or other plans, holds 5% or higher of the shares of a listed organisation,
and acquire shares in the listed organisation.
 Relevant stock are traded by implementing information which has earlier been disclosed
by others.
 Trade has an adequate basis or is formed due to an adequate source of information.
Normally, Strong defence could be formed if this could be proved that a particular
activity does not formed an insider dealing, market manipulation or false statement as per the
detailed CSRC rules.
While legal defence express the legal rights of expression and enable to information
which are ever-changing and financial injury are mostly common. Henceforth, there is a need to
know that there are the companies which are ready to defend those legal rights formed by the
local, nations, and other global laws (Subedi, 2016). Legal helps might be limited. Although,
serving only particular geographic locality or limited to the particular area of law. Here are
various groups which focuses in gaining legal helps for journalists, and other assisting
resources :
Media legal Defence Initiatives: This assist to defend the rights of reporters through out
continents and platforms. From print to broadcast and on line. London based groups works with
network of legal defence company throughout the planet, with individual lawyers and would
likewise pay legal fee if required.
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Remedies
Two major remedies are advisable for financial sectors in China in respect of corporate
liabilities and penalties.
Legal Remedies
These remain associated with judicial remedies, flowing from breach of a right. For
example financial compensation, damage and loss which occurs by breach of contract. This helps
to understand the legibility of repayment of liabilities and compensate financial losses which
happened form breach of contracts.
In China legislations and terms are defined subject to damage and causation under Tort
contracts.
Damage: compensation and awards are given subject to loss and damage occurs from
breach of contracts. The effective or dominant cause of loss defined subject to contracts are
covered in this remedies. Article 15 of Tort Law (2009) contains the actions and remedies
subject to contractual losses and liabilities. This contains the cessation of infringement, removal
of obstruction, elimination of danger, restoration to the original status, compensation for losses,
apologies, return of property and eliminations are main aspects in this damage remedies.
Causation: these remedies are provided when loss and damage are irrecoverable. This
may happen when breaks the chain of causation. There is a equal effect fall in respect of breach
of loss and which affect causing loss to the claimant. Parties remain responsible for these kind of
losses. Defendants may seek contribution from a third party who contributes to the causation of
the loss which is discussed under (1) civil liability (Contribution act 1978).
Equitable remedies
These remedies remain associated with award at the court's direction. This remedies is
divided in further categories
 Specific performance: it is related to cause and actions under a contract.
 Injunction: to forbid breach of contracts, actions and commissions which remain
connected with contractual obligations and potential acts.
 Rescission: remedies reading any kind of misrepresentations and misrepresentation of
essential aspects subject to contractual liabilities.
 Rectification: remedies which remain associated with correcting and rectifying factors
which are not intentionally added to contracts.
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 Under influence: remedies subject to viability of contracts.
Risk management also used as remedies in respect of adjustment of corporate liabilities.
Liability for violation of prudent operation rules which are specified in article of the BSL (2006).
article 37 which is related to banking financial institutions in violation of the prudent operation
rules, offences subject to depositary and legitimate rights and interests.
Advice on specific issues of law:
Under this, various issues which could arise while interpreting the law. Hereunder, this
can be said that the while interpreting the law, various issues are required to be explained in the
simplest form so that the statues can be interpreted effectively. However, interpretation of statues
are done in a simplest manner (Shen, 2015). If the statues are not easily understandable then in
that case, organisation can take further assistance from the outsiders effectively. There are
certain tools which could effectively used this in order to render. Statutory interpretation means
an action of a court in trying to assess and elaborating the legislation. There are so many cases
which have gone for interpretation. Basic rules of statutory interpretation, and same rules are
likewise implemented in other general law rules, they normally adopt one of three apporaches,
and approach is considered by any one specific judge which is normally emerge one of the basis
three approaches, and this approach adopted by one of the specific judge is normally of that
judge which is normally a reflection of that judge's main philosophy.
Literal Rule:
According to literal rule, this is the main task of the court to render a status's words their
literal meaning relative of whether emergence is sensible or not. In the most renowned verdict,
Lord Diplock in Duport Steel v Sirs said that the “the courts might sometimes be willing to
implement this rule instead of manifest absurdity which might emerge from the outcomes of its
application (Cheung and et. al., 2012). Literal rule is mostly implemented by orthodox judges
who strongly believe that their constitutional role is constricted to the elected legislative branch
of the government. For identifying the main purpose of legislature in passing a specific statue,
this approach limited to the judge to the so called black letter of law. The literal rule has been the
dominant approach emerged from covering of 100 years.
Procedural and Evidential Issues
With the establishment of a global criminal court they would need to constitutes one of
the major activities in respect to the development of human right laws. The primary motive of
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this parts of documents is to examine various issues those are related with procedural and
evidential problems. These all are being discuss with respect to proposed international criminal
court. These matter can be utmost important moment. The court is having various right to control
evidential aspects as a crucial part of their basic case management powers. The procedural
decision-making of court can assist the party to get more reliable solution to a given issues.
These are needed to be discuss with a person which is appointed by court to resolve their
financial problems.
It consists of practice direction and some other significant role of third party. Until,
dispute settlement practices is not much more large. It would outline the purpose of china
securities finance Ltd (Dolzer and Schreuer, 2012). This will explain primary procedural and
evidential problems that are being raised in an organisation. For the settlement of all those issues,
they need to discuss it with arbitrator. It is process in which any issues which is being submitted
or arises in the departments would be discuss with one or more arbitrator that can make a binding
decision on various disputes. Mostly this, option is for a private dispute resolution steps which is
being followed instead of going into a court.
Conclusion
From the above mentioned report, this can be rightly stated that the China Securities
company made Memorandum of Advice which comprises of various rules and regulations while
completing this. Various offences which have arisen in the cited organisation and their remdies
are mentioned in this report.
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REFERENCES
Books and Journals
Dolzer, R. and Schreuer, C., 2012. Principles of international investment law. Oxford University
Press.
Cheung, Y. W and et. al., 2012. China's outward direct investment in Africa. Review of
International Economics. 20(2). pp.201-220.
Shen, X., 2015. Private Chinese investment in Africa: Myths and realities. Development Policy
Review. 33(1). pp.83-106.
Subedi, S. P., 2016. International investment law: reconciling policy and principle. Bloomsbury
Publishing.
La Croix, S. J., 2016. Emerging Patterns of East Asian Investment in China: From Korea,
Taiwan and Hong Kong: From Korea, Taiwan and Hong Kong. Routledge.
Wenbin, H. and Wilkes, A., 2012. Analysis of China’s overseas investment policies. Cifor.
Corkin, L., 2012. Chinese construction companies in Angola: a local linkages perspective.
Resources Policy. 37(4). pp.475-483.
Law, S. H., Azman-Saini, W.N.W. and Ibrahim, M. H., 2013. Institutional quality thresholds and
the finance–Growth nexus. Journal of Banking & Finance. 37(12). pp.5373-5381.
Lu, Y. and Sun, T., 2013. Local government financing platforms in China: A fortune or
misfortune? (No. 13-243). International Monetary Fund.
Dolzer, R. and Schreuer, C., 2012. Principles of international investment law. Oxford University
Press.
Yackee, J.W., 2012. Controlling the International Investment Law Agency. Harv. Int'l LJ, 53,
p.391.
Song, S., George, S.F.C. and Chen, X., 2018. Housing investment and consumption in urban
China. In Urbanization and Social Welfare in China (pp. 101-120). Routledge.
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