Government and Policy

China's supreme court interprets illegal fundraising

Updated: 2011-01-05 06:51
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BEIJING - China's Supreme People's Court Tuesday introduced judicial interpretations to clarify crimes which are applicable to illegal fundraising activities.

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Practices of raising funds from the public that violate the country's laws regarding financial regulation and management shall be interpreted as illegal fundraising, according to a statement issued by the court.

Among them, unauthorized issuing of stocks and corporate bonds to the public or a group of people numbered over 200, will be treated as crimes of illegal issuing of stocks or corporate bonds.

Further, unauthorized fundraisings, which are publicized openly through media, promotion functions, text messages and other forms, and which target the public indiscriminately and promise the return of both the principal and interest, will be referred to as crimes of illegal deposits from the public.

The interpretations said that those who facilitate the illegal fundraising by offering assistance in publicity will be punished as complices.

Advertising service firms which are involved in facilitating illegal fundraising will be dealt with as crimes of of false advertising.

Over past years, China has seen rampant illegal fundraisings. The money raised through illegal means increases by 20 billion yuan each year, according to official figures.

Crimes of illegal fundraising are undermining the economic order and people's interests, said Wang Shaonan, a spokesperson with the Supreme People's Court.

The judicial interpretations, aimed to fight such crimes, are effective from January 4.

According to the Ministry of Public Security, Chinese police since 2008 have uncovered some 5,000 cases of illegal fundraising, arrested some 5,400 suspects and retrieved 12.2 billion yuan.