[Direct answer]In the Beijing area, when an enterprise receives a report, it should first secure evidence and conduct a careful assessment, then decide on internal handling, disciplinary action, or reporting to the police based on the circumstances. It is strictly prohibited to confront the involved party directly or deal with the matter publicly. Internal investigations should be limited to company affairs and employees' official duties, and must not infringe upon employees' legitimate rights and interests, let alone retaliate against the whistleblower. If any clues suggesting criminal activities are discovered, they shall be reported to the public security organ for transfer in accordance with the law, and the whistleblower's identity shall be strictly kept confidential. For cases involving fraud, corruption, senior executives, or financial matters, it is recommended to introduce external lawyers as soon as possible and cooperate with legal and internal audit departments to advance the investigation. According to Articles 110 and 112 of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018), please refer to the details for further information.Criminal defense and legal services for criminal case filing.

I. Problem Background and Typical Scenarios

The forms of reporting letters are varied: they may be submitted anonymously or under one's real name, and the content often involves issues such as kickbacks in procurement, embezzlement of official duties, transfer of interests, disclosure of trade secrets, and illegal operations. Management's first reaction to such reports often leads to several common mistakes: directly confronting the reported person with the letter, which results in the instant loss of evidence; posting the handling decision on the bulletin board, causing reputational damage to the reported person and triggering infringement disputes; dismissing the reported person solely based on a single report letter, which is procedurally illegal and may result in losing the labor dispute; or simply ignoring the report, only to face greater losses and bear responsibility for negligent management afterward. Reporting is just a lead; the way of responding to it determines the direction of the risks. For related matters, please consult professionals for advice.Beijing Henglu Law FirmA lawyer specializing in corporate compliance.

II. Key points of dispute

The controversy focuses on four points. Firstly, the boundaries of internal investigations: It is legitimate to verify work emails, approval flows, and business data within the scope of job duties using company equipment and systems, but tracking employees' private communications and whereabouts may infringe on their right to privacy. Secondly, the validity of investigation conclusions: Punishments made without ensuring the reported person's right to defense or without following democratic procedures to formulate and publicize rules and regulations may be deemed as illegal dismissals. Thirdly, the balance between whistleblower protection and informed disclosure: There is a tension between protecting the whistleblower's identity and the need for information during investigations, and the scope of disclosure should be controlled according to the principle of minimal disclosure. Fourthly, the boundaries of handling methods: "internal settlements" involving suspected crimes may constitute leniency, while publicly disclosing the details of reports may lead to insults and defamation. Both extremes should be avoided.

III. Professional analysis by Henglue Law Firm

A theft case handled by Attorney Liu Liqiang illustrates the seriousness of determining the amount of the crime involved. The suspect stole three items, including imported honey, from a supermarket, with a total value of over 2,000 yuan according to the store's price list. One bottle of honey alone cost over 1,900 yuan. Based on this, the public security organ determined the amount of the theft and referred the case for examination and prosecution. During the defense, Attorney Liu Liqiang found flaws in the price determination: after multiple inquiries, it was revealed that the honey was an imported product exclusively distributed by a domestic company, and the online price of the same product was only about half of the store's price. The wholesale and retail price lists obtained from the domestic general agent were also much lower than the store's price. Therefore, the attorney applied for a price authentication and submitted evidence such as online prices and agent prices, arguing that the amount of the theft did not meet the threshold for criminal prosecution. Ultimately, the procuratorial organ returned the case to the public security organ, which decided to withdraw the case and release the suspect on bail. This case reminds enterprises that internal price lists and accounting records are only unilateral records. They must withstand professional inspections such as price authentication after entering the criminal process. When handling reports and securing evidence, enterprises should also be objective, comprehensive, and follow standard procedures to solidify the evidence chain rather than hastily drawing conclusions based on unilateral materials. This case was handled by Beijing Henglu Law Firm.Liu LiqiangAttorney (practice license number: 11101200910454358, subject to the document issued by the judicial administrative organ) acting as an agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 110 of the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018), which stipulates that any unit or individual who discovers criminal facts or suspects of a crime has the right and obligation to report or denounce it; Article 112 of the Criminal Procedure Law, which regulates the review and filing of report materials; Article 4 of the Labor Contract Law of the People's Republic of China (amended in 2012), which stipulates that rules and regulations must be formulated through democratic procedures and publicly announced; Article 39, which stipulates the termination of employment for serious violations of rules and regulations; and Article 246 of the Criminal Law of the People's Republic of China, which stipulates criminal liability for insult and defamation. Action list: 1. Upon receiving a report, first seal and store the evidence, and simultaneously preserve any potentially deleted emails, approval flows, financial vouchers, and surveillance footage. 2. Establish an investigation team led by the legal department and involving external lawyers, and clarify the scope, procedures, and confidentiality requirements in writing. 3. Conduct investigations limited to company assets and official duties, using lawful methods and protecting the whistleblower's identity throughout the process. 4. Handle disciplinary violations in accordance with company rules and regulations, and organize evidence for criminal reporting and transfer of cases, avoiding private settlements or "internal resolution". 5. Subsequently, improve anti-fraud and compliance systems, address management loopholes, and integrate relevant services.Legal and compliance services for enterprises on a long-term basisI understand.

5. Henglu Law Firm's Reminder

When handling reports, the three most common pitfalls are: confrontation leading to the loss of evidence; public handling leading to reputation infringement; and delay leading to increased losses and overlapping responsibilities. With a high proportion of anonymous reports and mixed authenticity of clues, it objectively requires enterprises to respond based on procedures rather than emotions. When handling similar corporate compliance matters in the Beijing area, it is recommended to involve legal professionals from the beginning of the report.Beijing Henglue Law FirmThe lawyer participates in the design of the plan, clarifying the legal risks of the investigation boundaries, evidence fixation, and follow-up processing all at once.

VI. Frequently Asked Questions

Q1: If the content of the report is unverified, can the company directly discipline or even dismiss the employee?

It depends on the evidence and procedures. A report is just a clue, not necessarily equivalent to a fact; only anonymous reports that lack other evidence to corroborate are generally insufficient to determine that an employee has violated the rules, and terminating the labor contract based on this may be considered an illegal termination. However, if the enterprise fixes the evidence through compliance procedures and can prove that the employee has seriously violated the rules and regulations, it can terminate the contract according to law and does not need to pay economic compensation. The key points are two: whether the evidence is solid, and whether the rules are formulated and announced through democratic procedures. The decision on punishment should be delivered in writing and the employee should be informed of the appeal channels. If there are procedural flaws, even if the facts exist, the employer may still lose the case.

Q2: What evidence should be preserved during an internal investigation?

The evidence shall be preserved in four categories. First, the original complaint materials: the original documents, the delivery records, and the clues to the source of the anonymous letters. Second, electronic data: work emails, instant messaging records, approval processes, and system operation logs, which should be preserved and protected from deletion as soon as possible. Third, financial and business vouchers: contracts, invoices, bank statements, inventory records, and reimbursement documents. Fourth, audio-visual and site evidence: surveillance footage, access control records, and meeting minutes. When preserving the evidence, attention should be paid to the legality of the methods used. If the evidence is retrieved through the company's system backend, the retrieval time and the operator's records should be preserved. When necessary, notarization should be carried out to form a complete chain of evidence.

Q3: How is the fee calculated for hiring a lawyer to conduct an internal investigation and ensure corporate compliance?

Internal investigations and compliance services are typically charged on a project basis or by hourly rates, depending on the size of the enterprise, the number of reported matters, the levels involved, and the amount of data analyzed. There is no unified government pricing for these services; the fees are determined through negotiations between law firms and enterprises and formalized in written contracts. A common model involves a one-time special investigation combined with ongoing legal advisory services. It should be noted that enterprise compliance services involving criminal risks are also not subject to contingency fees. Before signing a contract, it is essential to clarify the scope of services, deliverables, and staffing arrangements to avoid hidden costs after signing a low-price contract.

Q4: How long does it usually take to get the results of an internal investigation?

It depends on the scope of the investigation. For internal investigations focusing on a single matter with evidence concentrated in system and financial data, preliminary conclusions can usually be reached within two to four weeks; for investigations involving multiple people, multiple transactions, cross-regional issues, or requiring audit cooperation, the timeframe may be extended to two to three months. If clues suggesting criminal involvement are uncovered during the investigation, the time spent on subsequent criminal proceedings will not be included in the internal investigation cycle. It is recommended to set phased milestones at the start of the investigation, first securing evidence and then conducting interviews for verification, to avoid destroying evidence before it can be collected.

Q5: After receiving the complaint letter, what is the first step that management should take?

There are four steps to advance the investigation: First, register the received materials immediately and keep the originals sealed to minimize the scope of those who are aware of the investigation to the necessary personnel; Second, secure evidence as soon as possible by freezing emails, approval flows, financial vouchers, and surveillance to prevent deletion; Third, formulate an investigation plan led by the legal department with the participation of external lawyers, clarifying the scope, procedures, and measures for protecting whistleblowers; Fourth, handle the cases based on the investigation conclusions: disciplinary violations will be dealt with in accordance with regulations, suspected crimes will be reported and transferred for prosecution, and unverified allegations will be properly recorded and the rights and interests of the reported individuals will be protected. Throughout the entire process, there will be no cross-examination, no public disclosure, and no delay.

The above content is based on the judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Law Firm for specific cases.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, to avoid missing the statutory time limit.Criminal defense legal services·Attorney Shang Jiangpeng·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.