Section 1 Definition and Forms of Fraud
Fraud refers to any act committed by internal or external personnel of the Company through illegal and irregular means such as deception and concealment, for the purpose of seeking illegitimate personal benefits and impairing the legitimate economic interests of the Company.
Major forms of fraud include:
- Confidential information breach: Any act where an employee steals, attempts to steal the Company’s confidential information, or deliberately discloses the Company’s commercial information.
- Bribery acceptance: Any act where an employee and their interested parties (including but not limited to immediate family members) solicit or illegally accept bribes, kickbacks, loans and other forms of benefits from affiliated enterprises, suppliers and customers.
- Fraudulent falsification: Any act where an employee abuses their position to seek personal gains, including but not limited to forging or altering documents, providing false information, forging or assisting in forging false certificates and supporting materials.
- Non-competition breach: Any act where an employee, without prior authorization, engages in business activities competitive with the Company, including but not limited to operating or participating in competing business entities during employment.
- Property embezzlement: Any act where an employee abuses their position to illegally use, misappropriate, steal or embezzle the Company’s property.
- Collusive fraud: Any act of collusion, whether among employees or between employees and customers, suppliers, other enterprises or individuals, conducted for personal gain and to the detriment of the Company’s interests.
- Intentional concealment of transaction matters: Including but not limited to recognition of after-sales refunds as revenue, premature revenue recognition, false shipments, fictitious orders, fabricated sales volume, fictitious marketing activities, overstated headcount, and falsified employee payroll.
- Incurring expenses for illegitimate purposes, such as paying bribes or kickbacks.
- Diverting the Company’s business opportunities or transaction projects with foreseeable profits to other individuals or entities by abusing one’s position, to the detriment of the Company’s interests (e.g., diversion of projects).
- Soliciting or illegally accepting property from third parties by abusing one’s position.
- Establishing off-book funds or maintaining unrecorded accounts by abusing one’s position.
- Any other fraudulent acts prejudicial to the economic interests of the Company.
Section 2 Reporting Rewards
- The Company shall grant rewards to whistleblowers who provide valid leads and result in the verification of fraudulent acts.
- The reward shall be no less than RMB 5,000, determined in accordance with the impact level of the case. Where economic losses are recovered, a reward equivalent to 5% of the recovered loss amount shall apply. The higher of the two amounts shall be paid.
- Rewards shall be disbursed within 15 working days following the final disposition of the fraud case.