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China to Fortune 500: Confess, you’ll feel better

Representatives of over 30 firms were gathered in a small Beijing hotel last month to receive a stern message from the National Development and Reform Commission (NDRC) division chief, Xu Xinyu.

Xu warned those present at the meeting that they should confess to any economic crimes they may have committed before they are found out, or face harsh penalties. He also stated that companies who mount a defence against accusations made by the NDRC would face even stiffer punishment.

Participants were then shown how to write up “self-criticisms,” a popular tool for party members to admit their guilt and demonstrate steps taken to correct their behaviour or “self-rectification.”

“Self-criticisms” have often led to lenient sentences for those involved. Nestlé was not fined in the recently concluded NDRC investigation into price-fixing and collusion by baby formula producers after the company admitted its guilt and carried out “self-rectification.”

According to a Reuter’s source, GE, Siemens, Samsung Electronics, Microsoft, Volvo, IBM Corp, Michelin, Swedish packaging giant Tetra Pak, Intel Corp, Qualcomm, Dumex, a subsidiary of Danone, and U.S. cable equipment maker Arris Group Inc were all present at the meeting.

The NDRC has launched nearly 20 probes in the past three years, and has hinted that more investigations into local and multinational firms are in the works.

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Melanie Lansakara is a manager with ethiXbase and the China Compliance Digest.

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