Laws of the People's Republic of China

    With a view to safeguarding social and economic order, protecting the
legitimate interests of companies and punishing criminal behavior violating
the Company Law, the following additional regulations shall be made with
regard to the Criminal Law:

    1. Where an individual applying for company registration falsely reports
his registered capital by using falsified documents of certification or
resorting to other fraudulent means to deceive the company registration
authority, if he registers the company through these means, and if the amount
of registered capital falsely reported is large, or if the consequences or
other circumstances are serious, the offender shall be sentenced to fixed-term
imprisonment of not more than three years or criminal detention, and may
concurrently be fined an amount of not more than ten percent of the registered
capital falsely reported.

    Where an organization commits the crime mentioned in the preceding
paragraph, it shall be sentenced to a fine of not more than ten percent of the
registered capital falsely reported, and the personnel in charge directly
responsible or other personnel directly responsible shall be sentenced to
fixed-term imprisonment of not more than three years or criminal detention
according to the provisions in the preceding paragraph.

    2. Where a promoter or a shareholder, in violation of the Company Law,
makes a false capital contribution by failing to pay the promised cash or
tangible assets or failing to transfer property rights, or surreptitiously
withdraws his capital contribution after the company has been founded, if the
amount involved is large, or if the consequences or other circumstances are
serious, the offender shall be sentenced to fixed-term imprisonment of not
more than five years or criminal detention, and may concurrently be fined an
amount of not more than ten percent of the false capital contribution or the
capital contribution withdrawn surreptitiously.

    Where an organisation commits the crime mentioned in the preceding
paragraph, it shall be sentenced to a fine of not more than ten percent of the
false capital contribution or the capital contribution withdrawn
surreptitiously, and the personnel in charge directly responsible or other
personnel directly responsible shall be sentenced to fixed-term imprisonment
of not more than five years or criminal detention according to the provisions
in the preceding paragraph.

    3. Where an individual produces false prospectuses concerning share
offers, false subscription forms for shares, or false methods of offer of
company bonds, to issue shares or company bonds, if the amount involved is
large, or if the consequences or other circumstances are serious, the offender
shall be sentenced to fixed-term imprisonment of not more than five years or
criminal detention, and may concurrently be fined an amount of not more than
five percent of the funds illegally raised.

    Where an organization commits the crime mentioned in the preceding
paragraph, it shall be sentenced to a fine of not more than five percent of
the capital illegally raised, and the personnel in charge directly responsible
or other personnel directly responsible shall be sentenced to fixed-term
imprisonment of not more than five years or criminal detention according to
the provisions in the preceding paragraph.

    4. Where a company submits to the shareholders and the general public
false financial or accounting reports or reports which conceal important
facts, thereby greatly harming the interests of the shareholders or others,
the personnel in charge directly responsible or other personnel directly
responsible shall be sentenced to fixed-term imprisonment of not more than
three years or criminal detention, and may concurrently be fined an amount of
not more than 200,000 yuan.

    5. Where a company, in the course of its liquidation, conceals property or
records false information in its balance sheets or its inventory of assets, or
distributes the company assets prior to the full payment of its debts, thereby
greatly harming the interests of its creditors or others, the personnel in
charge directly responsible or other personnel directly responsible shall be
sentenced to fixed-term imprisonment of not more than five years or criminal
detention, and may concurrently be fined an amount of not more than 200,000
yuan.

    6. Where the personnel in charge of asset valuation, capital verification,
certificate verification or auditing intentionally provides false documents of
certification, if the circumstances are serious, the offenders shall be
sentenced to fixed-term imprisonment of not more than five years or criminal
detention, and may concurrently be fined an amount of not more than 200,000
yuan.

    Where an organisation commits the crime mentioned in the preceding
paragraph, it shall be sentenced to a fine of not more than five times the
amount of its illegal gains and the personnel in charge directly responsible
and other personnel directly responsible shall be sentenced to fixed-term
imprisonment of not more than five years or criminal detention according to
the provisions in the preceding paragraph.

    7. Where shares or company bonds are issued without the approval of the
relevant department responsible for this as stipulated by the Company Law, if
the amount involved is large, or if the consequences or other circumstances
are serious, the offender shall be sentenced to fixed-term imprisonment of
not more than five years or criminal detention, and may concurrently be fined
an amount of not more than five percent of the funds illegally raised.

    Where an organisation commits the crime mentioned in the preceding
paragraph, it shall be sentenced to a fine of not more than five percent of
the funds illegally raised and the personnel in charge directly responsible
shall be sentenced to fixed-term imprisonment of not more than five years or
criminal detention according to the provisions in the preceding paragraph.

    8. State personnel of the relevant departments responsible who approve
applications for the establishment or registration of companies, or
applications for the issue or listing of shares or company bonds that do
not meet the requirements as stipulated by law, and have thereby caused major
losses to public property or to the interests of the State and the people,
shall be punished in accordance with the provisions of Article 187 of the
Criminal Law.

    Where a more senior department forces the registration authority and its
personnel to commit the acts described in the preceding paragraph, the
personnel in charge of the former directly responsible shall be punished
according to the provisions in the preceding paragraph.

    9. Where a director, a supervisor or an employee of a company takes
advantage of his position to extort or accept bribes, if the amount involved
is relatively large, the offender shall be sentenced to fixed-term
imprisonment of not more than five years or criminal detention; if the amount
involved is very large, the offender shall be sentenced to fixed-term
imprisonment of not less than five years and may concurrently have his
property confiscated.

    10. Where a director, a supervisor or an employee of a company takes
advantage of his position or his occupation to misappropriate the company
property, if the amount involved is relatively large, the offender shall be
sentenced to fixed-term imprisonment of not more than five years or criminal
detention; if the amount involved is very large, the offender shall be
sentenced to fixed-term imprisonment of not less than five years, and may
concurrently have his property confiscated.

    11. Where a director, a supervisor or an employee of a company takes
advantage of his position to divert company funds for his own usage or to lend
company funds to another person, if the amount involved is relatively large
and has not been returned after three months, or if although the amount has
been returned within three months but the amount involved is relatively large
and was used for seeking profits or conducting illegal activities, the
offender shall be sentenced to fixed-term imprisonment of not more than three
years or criminal detention. If the amount involved is relatively large and
has not been returned, the offender shall be punished for the misappropriation
of property as stipulated in Article 10 of this Decision.

    12. State personnel who commit the crimes provided in Articles 9, 10 or 11
of this Decision shall be punished in accordance with the Supplementary
Provisions Concerning the Punishment of the Crimes of Embezzlement and
Bribery.

    13. If there are any illegal gains derived from the crimes stipulated in
this Decision, these shall be confiscated.

    Where an offender who commits a crime as stipulated in this Decision is
simultaneously sentenced to the confiscation of illegal gains, the payment of
a fine, the confiscation of property and the assumption of the responsibility
to provide civil compensation, if the offender's property is not sufficient to
allow full payment, then civil compensation shall be satisfied first.

    14. This Decision shall apply to employees of enterprises other than
limited liability companies and companies limited by shares who commit the
crimes stipulated in Articles 9, 10 or 11 of this Decision.

    15. This Decision shall come into effect as of the date of promulgation.