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Corporate Governance

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On 24 June 2020, the China Banking and Insurance Regulatory Commission (CBIRC) issued a circular on Carrying out the Follow-up Checks for the Rectification of Market Problems in the Banking and Insurance Sectors (the “Circular”). The CBIRC proposes to launch follow-up checks to review the steps taken to correct industry problems identified in the past three years following some high-profile cases, particularly in the areas of corporate governance, risk management and repeated violations of several laws and regulations.

Our alert sets out a brief summary of key “follow-up” checks outlined in the Circular and provides some practical tips that we have developed from our own experience on how companies can ensure their compliance programs satisfy the guidelines. More information can be found in our guide on 5 Essential Elements Of Corporate Compliance.

This article relates to a recent High Court decision regarding dishonest assistance, fraudulent trading (pursuant to s.213 of the Insolvency Act) and vicarious liability and will be particularly relevant to brokers, banks, traders and other intermediaries which process payments and other transactions.  The Disputes Resolution team shed light on the circumstances in which those entities and individuals may be found by the Courts to have acted dishonestly by failing to seek further information where they have suspicions of potential wrongdoing. This will also be useful reading in preparation for a post-Covid-19 world, when the repercussions of actions that took place before and during the pandemic will be better understood and will no doubt be thrust under a spotlight.