CHINA Law and Practice Contributed by: Alan Zhou, Jacky Li, Weiwei Gu, Steven Zhu and Jenny Chen, Global Law Office
investors exceeding CNY500,000), shall be sentenced to a fixed-term imprisonment and incur a fine of up to CNY100,000. From the perspective of administrative law, the legal liabilities relating to the dissemination of false infor - mation are mainly regulated in the Securities Law. Specifically, according to Article 55 of the Securities Law, making use of false or uncertain significant infor - mation to induce investors into securities trading is strictly prohibited as a market-manipulating practice, and Article 192 of the Securities Law stipulates that the violator shall be ordered to dispose of the illegally held securities pursuant to the law, with illegal gains being confiscated and a fine imposed. If the afore - said violator is a company or other organisation, the directly accountable persons shall receive a warning together with a fine of up to CNY5 million. In addi - tion, anyone disseminating fraudulent information to disrupt the order of the securities market shall be sub - ject to legal penalties such as the imposition of a fine together with the confiscation of illegal gains. 2.4 Public Officials Misappropriation of public funds by any state func - tionary as a result of taking advantage of his or her position would result in that state functionary being convicted of the crime of misappropriation of public funds. The crime of misappropriation of public funds contains three specific categories: • appropriation of public funds for the state function - ary’s own use or for conducting illegal activities; • appropriating a relatively large amount of public funds for profit-making activities; and • appropriating a relatively large amount of public funds without returning it after the lapse of three months. A state functionary convicted of the crime shall be sentenced to imprisonment of up to a term of life. Heavier punishment will be incurred if the aforesaid misappropriated funds or materials were allocated for significant public purposes, such as disaster relief, emergency rescue, flood prevention and control, spe - cial care for disabled servicemen and women and the families of revolutionary martyrs and servicemen and women, aid to the poor, migration or social relief.
In accordance with the Criminal Law, any state func - tionary who extorts or accepts money or property from another person by taking advantage of his or her position in order to seek benefits for that person, or by illegally accepting rebates or service charges of various descriptions, shall be convicted of accepting bribes. In accordance with the Criminal Law, any state func - tionary who unlawfully takes public property into his or her possession by embezzlement, theft, fraud or any other means, by taking advantage of his or her position, shall be convicted of corruption; where the amount involved is extremely large (over CNY3 mil - lion) and extremely severe losses are caused to the interests of the state and the people, the maximum punishment shall be the death penalty. Under the Criminal Law, favouritism is an aggravat - ing factor (but not an independent crime) when state functionaries commit the crime of abusing power or the crime of negligence of duty. The crime of abus - ing power refers to state functionaries taking deci - sions on and handling matters beyond their authority in violation of the law, and the crime of negligence of duty refers to negligence of duty by state functionar - ies who are seriously irresponsible and fail to perform or fail to conscientiously perform their duties. State functionaries who commit the crime of abusing power or the crime of negligence of duty, thereby causing heavy losses to the interests of the state and the peo - ple, could be sentenced to a fixed-term imprisonment of up to seven years. With the aggravating factor of favouritism, the term of imprisonment could be up to ten years. In addition, the Criminal Law stipulates several crimes committed by state functionaries in specific govern - ment functions through practising favouritism, such as the crime of failing to collect or collecting insufficient tax by practising favouritism. 2.5 Intermediaries With respect to the commission of bribery through an intermediary, depending on the identity of the inter - mediary and how the intermediary works, the Criminal Law generally stipulates the following three kinds of crimes:
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