Press Release

Han Kun lawyers Liu Xin and Wu Yue recently handled a successful compliance non-prosecution case in which our client, a technology company in Shanghai, obtained a non-prosecution decision through business transformation and compliance rectification.  Han Kun, acting as the compliance consultant for the company, assisted in completing the compliance rectification efficiently and with high quality during the period of the People's Procuratorate's examination and prosecution of the case.  After a hearing, the People's Procuratorate clearly recognized the company's rectification efforts and decided not to prosecute the leader of the company.

The company involved in the case formerly provided futures brokerage services.  The leader of the company was investigated for illegal business operations and faced the risk of being sentenced to a prison term of not more than five years due to certain irregular activities such as providing futures investment forecasts and advice to customers while serving as an intermediary.  When the case proceeded to the period of examination and prosecution, the leader engaged the Han Kun Criminal Legal Services Team for support.  Considering the company had been exploring online mini dramas prior to this case and had achieved outstanding results in a short time, and its leader was determined to transform the company's business, Han Kun believed that the company would be able to rectify its irregular business practices and should not face liquidation.  Based on the factual circumstances, Han Kun actively communicated with the People's Procuratorate and applied for non-prosecution.  Considering that the company had transformed its business thoroughly and the mini drama services it engaged in after the transformation is a new business with promising prospects, the People's Procuratorate agreed to initiate a third-party supervision and evaluation mechanism to confirm the company remained in compliance.

During the investigation, Han Kun assisted the company in successfully exploring the compliance rectification remedy after its business transformation.  Unlike the common special compliance rectifications such as "data compliance" and "tax compliance", there are few precedents for how a company conducts compliance rectification after a business transformation.  Based on in-depth investigation and research, Han Kun identified the root causes of these cases, identified the potential risks, and advised focusing on compliance with respect to advertising content and intellectual property rights related to its mini drama business, and to pay close attention to tax, anti- commercial bribery, and other potential risks in light of the taxation and business characteristics of the company.  Meanwhile, Han Kun recommended that the company appoint its core partners as supervisors and members of the compliance management team, so as to avoid a situation where the leader of the company had the final say on any rectification measures.  In addition, the company actively used artificial intelligence software to assist in reviewing the content of its mini dramas, which was also a major highlight for the company's compliance rectification efforts.

Han Kun assisted the company in establishing rules and systems, amending contracts, carrying out training, examining and controlling risks, and completing the compliance rectification in advance.  During the investigation, the company also expanded its business overseas and established partnerships with many platforms, including Facebook.  Meanwhile, the business results were remarkable with both the profit and the amount of tax paid increasing by over 300%.  The quality of the compliance rectification in this case was highly praised by the third-party supervision and evaluation team and the People's Procuratorate.

Han Kun Criminal Legal Services Team provided the compliance rectification services with respect to this project.  The Han Kun Criminal Legal Services Team focuses on criminal compliance, criminal defense for commercial crimes, internal investigations and accusations, criminal crisis response, and other criminal legal services.  In this case, the Han Kun lawyers' profound professional skills, precise defense strategies, and dedication received high praise from the company and other parties in this case.