It is the policy of ChinaEdu Corporation (the “Company” or “ChinaEdu”) to conduct its affairs in accordance with all applicable laws, rules and regulations of the countries in which it does business. This Code of Business Conduct and Ethics (“Code”) applies to the Company’s employees, officers and non-employee directors, including the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions (“Designated Executives”). This Code is the Company’s “code of ethics” as defined in Item 16B of Form 20-F. This Code is designed to promote:
ChinaEdu has established standards for behavior that affects the Company, and employees, officers and directors should pattern their daily performance in compliance with those standards. The Company promotes ethical behavior and encourages employees to talk to supervisors, managers, executive officers or other appropriate personnel when in doubt about the best course of action in a particular situation. Non-employee directors are encouraged to talk to the Company’s Chief Executive Officer or Chief Financial Officer in such situations.
Additionally, employees should report to appropriate personnel violations of laws, rules, regulations or this Code, as well as complaints, concerns, and information regarding Accounting Matters (which should include accounting practices, internal accounting controls, or other auditing matters), corporate fraud, or violations of laws committed by the Company or its agents. Employees reporting such violations or complaints good faith will not be subject to discipline or retaliation. Reporting procedures for employees are set forth under “Compliance and Reporting” below.
This Code covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide you. Corporate policies and procedures provide details pertinent to many of the provisions of this Code. You are responsible for reading and understanding this Code and the Company’s other policies and procedures, and complying with them at all times. Although there can be no better course of action than to apply common sense and sound judgment, do not hesitate to use the resources available whenever it is necessary to seek clarification.
Certain provisions of this Code require employees to act, or refrain from acting, unless prior approval is received from the appropriate person. Employees requesting approval pursuant to this Code should request such approval in writing to the Chief Executive Officer or Chief Financial Officer. Approvals relating to executive officers and directors must be obtained from the Company’s Board of Directors. All other approvals may be granted by the Chief Executive Officer or Chief Financial Officer. Employees may contact the Chief Executive Officer or Chief Financial Officer for additional information on obtaining approvals.
Other provisions of this Code require employees to act, or refrain from acting, in a particular matter and do not permit exceptions based on obtaining an approval. Waiver of those provisions may only be granted by the Board of Directors.Waivers relating to executive officers and directors must be promptly disclosed to the Company’s shareholders.
Any amendments to this Code may only be made by the Board of Directors and must be promptly disclosed to the Company’s shareholders.
A conflict of interest arises any time an employee’s personal interests or activities influence his or her ability to act in the best interests of the Company. All employees must discharge their responsibilities solely on the basis of what is in the best interest of the Company and independent of personal consideration or relationships. Employees must disclose any potential conflicts of interest to the Chief Executive Officer or Chief Financial Officer or such officers’ designee. Directors (including non-executive directors), officers and employees should also refer to the Related Party Transaction Procedures for additional conflict of interest procedures that specifically govern the conduct of directors, officers and employees in the context of related party transactions involving the Company.
An employee should also disclose potential conflicts of interest involving the employee’s spouse, siblings, parents, in-laws, children, life partner and members of the employee’s household. An employee should not make or influence any decision that could directly or indirectly benefit his or her close relative and, in order to protect the employee and the Company from the appearance of a conflict of interest, he or she should make appropriate disclosure of the interest to the Chief Executive Officer or Chief Financial Officer or such officers’ designee.
Although ChinaEdu has no interest in preventing employees from engaging in lawful activities during nonworking hours, employees must make sure that their outside activities do not conflict or interfere with their responsibilities to the Company. For example, without approval by the Company’s Chief Executive Officer or Chief Financial Officer, an employee generally may not:
ChinaEdu encourages you to be actively involved in your community through volunteer service to charitable, civic and public service organizations, and through participation in the political process and trade associations.
Employees must make sure, however, that their service is consistent with their employment with ChinaEdu and does not pose a conflict of interest. This is particularly important before accepting any leadership position (such as membership on the board of a charitable or civic organization), before seeking or accepting political office and before soliciting a charitable contribution.
Serving as a director of another corporation may create a conflict of interest. Employees must disclose such service to the Chief Executive Officer or Chief Financial Officer or such officers’ designee and obtain prior approval before serving on the board of another company, whether or not such company is a competitor of ChinaEdu.
Employees should avoid even the appearance of a conflict of interest in their relationships with competitors. “Competitors” include any company operating in the educational services business. Without approval, employees may not:
A conflict of interest can also arise because of the business activities of your close relations. For example, an employee may have a potential conflict of interest wherever a close relative has a significant relationship with, or has a significant financial interest in, any supplier, customer or Competitor.
An employee may not make or attempt to influence any decision that could directly or indirectly benefit his or her close relative. To protect the employee and the Company from the appearance of a conflict of interest, he or she should make appropriate disclosure of the interest to the Chief Executive Officer or Chief Financial Officer or such officers’ designee.
You are prohibited from taking for yourself personal opportunities that are discovered through the use of corporate property, information or position without approval. Without approval, no employee may use corporate property, information or position for improper personal gain, and no employee may compete with the Company directly or indirectly except as permitted by Company policies.
All employees should protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. All Company assets should be used for legitimate business purposes.
Company resources may be used for minor personal uses so long as such use is reasonable, does not interfere with the employee’s duties, is not done for pecuniary gain, does not conflict with or harm the Company’s business and does not violate any Company policy.
ChinaEdu seeks to outperform its competition fairly and honesty. The Company seeks competitive advantages through superior performance, not unethical or illegal business practices. Each employee must endeavor to deal fairly with the Company’s customers, suppliers, competitors and employees and must not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair-dealing practice.
Fair competition laws, including the U.S. and PRC antitrust rules, limit what ChinaEdu can do with another company and what ChinaEdu can do on its own. Generally, the laws are designed to prohibit agreements or actions that reduce competition and harm consumers. You may not enter into agreements or discussions with Competitors that have the effect of fixing or controlling prices, dividing and allocating markets or territories, or boycotting suppliers or customers. U.S. and foreign antitrust laws also apply to imports and exports.
Use of Company funds or other Company property for illegal, unethical or otherwise improper purposes is prohibited. The purpose of business entertainment and gifts in a commercial setting is to create goodwill and a sound working relationship, not to gain advantage with customers or suppliers.
The use of Company funds, facilities or property for any illegal or unethical purpose is strictly prohibited; provided, that certain facilitating payments discussed in “Observation of Applicable Laws” are permitted.
ChinaEdu is committed to the highest business conduct standards wherever it operates. ChinaEdu observes these standards worldwide, even at the risk of losing business. While no one can anticipate all the situations that may present challenges to ChinaEdu employees doing business in the worldwide marketplace, the following guidelines always apply:
No new ChinaEdu services or products should be offered in any new country without prior approval, and then only in accordance with the applicable local country’s regulations and requirements.
As noted above, ChinaEdu is committed to complying with the laws of the countries where it operates. In some countries, a very limited category of small payments to facilitate or expedite routine nondiscretionary governmental actions may be permitted as exceptions to anti-bribery laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”). The requirements pertaining to such payments are complex. ChinaEdu employees must obtain prior approval of the Chief Executive Officer and Legal Department before making any such payment.
No political contributions are to be made using ChinaEdu funds or assets, or the funds or assets of any ChinaEdu subsidiary, to any political party, political campaign, political candidate or public official in any country, unless the contribution is lawful and expressly authorized in writing. In addition, no ChinaEdu employee may make a political contribution on behalf of ChinaEdu or its subsidiaries, or with the appearance that such contribution is being made on behalf of ChinaEdu or its subsidiaries, unless expressly authorized in writing. A “contribution” is any direct or indirect payment, distribution, loan, advance, deposit, or gift of money, services or anything of value in connection with an election or to an organization or group formed to support or defend a referendum or ballot issue.
You are responsible for the accuracy of your respective records, time sheets and reports. Accurate information is essential to ChinaEdu’s ability to meet legal and regulatory obligations and to compete effectively. The records and books of account of ChinaEdu must meet the highest standards and accurately reflect the true nature of the transactions they record. Destruction of any records, books of account or other documents except in accordance with the Company’s policies is strictly prohibited.
You must not create false or misleading documents or accounting, financial or electronic records for any purpose, and no one may direct an employee to do so. For example, expense reports must accurately document expenses actually incurred in accordance with ChinaEdu policies. You must not obtain or create “false” invoices or other misleading documentation or invent or use fictitious entities, sales, purchases, services, loans or other financial arrangements for any purpose relating to ChinaEdu. Employees are also responsible for accurately reporting time worked.
No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in the Company’s books or records for any reason. No disbursement of corporate funds or other corporate property shall be made without adequate supporting documentation or for any purpose other than as described in the documents. All employees shall comply with generally accepted accounting principles and the Company’s internal controls at all times.
It is the policy of the Company to cooperate with all government investigations. You must promptly notify counsel of any government investigation or inquiries from government agencies concerning ChinaEdu. You may not destroy any record, books of account, or other documents relating to ChinaEdu except in accordance with the Company’s document retention policy. If you are aware of a government investigation or inquiry you may not destroy any record, books of account, or other documents relating to ChinaEdu unless advised by the Chief Executive Officer or Chief Financial Officer that you may continue to follow the Company’s normal document retention policy.
You must not obstruct the collection of information, data or records relating to ChinaEdu. The Company provides information to the government that it is entitled to during an inspection, investigation, or request for information. You must not lie to government investigators or making misleading statements in any investigation relating to ChinaEdu. You must not attempt to cause any employee to fail to provide accurate information to government investigators.
Employees have the right to consult their own legal counsel at their own expense.
The Company operates in a highly regulated environment. The agencies that regulate its business include the State Council, the Ministry of Education, the General Administration of Press and Publication, the Ministry of Information Industry, the Ministry of Civil Affairs and the State Administration of Industry and Commerce, plus many other national, provincial and local agencies. The Company and its employees must comply with the regulatory requirements of these agencies. Employees are expected to take an active role by being knowledgeable about all applicable laws and regulations, attending trainings and requesting information. Employees are required to immediately report regulatory violations, suspected regulatory violations, or potentially harmful or dangerous conditions to the Chief Executive Officer or Chief Financial Officer.
Employees, officers and directors who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. To assist in complying with this policy, the Company has adopted an Insider Trading Policy which you should read carefully.
Any employee who violates the provisions of this Code will be subject to disciplinary action, up to and including termination. Willful disregard of criminal statutes underlying this Code may require the Company to refer such violation for criminal prosecution or civil action.
1.Inquiries Regarding this Code and Reports of Actual or Possible Violations of this Code. Questions regarding the policies in this Code may be directed to the Chief Executive Officer or Chief Financial Officer. Managers and supervisors are expected to take a leadership role in promoting ethical business conduct. Any employee having knowledge of, or questions or concerns about, an actual or possible violation of the provisions of this Code is obligated to promptly report the matter to his or her immediate supervisor or to the Chief Executive Officer or Chief Financial Officer. Anonymous reports can be sent as follows:
By Email:To the applicable supervisor or to the Chief Executive Officer or Chief Financial Officer; anonymity is preserved when an employee uses a personal email account and his or her identity is not immediately apparent from his or her email address; or
By Mail:To the applicable supervisor or to the Chief Executive Officer or Chief Financial Officer at ChinaEdu’s principal executive offices in Beijing.
If a supervisor receives a report concerning alleged actual or possible conduct in violation of this Code, he or she shall promptly forward it to the Chief Executive Officer and the Chief Financial Officer. Upon receipt of a report, the Chief Executive Officer or the Chief Financial Officer or their designees shall take the following actions:
2.Confidential Complaints of Accounting Matters, Corporate Fraud or Violation of laws. Employees should also report complaints, concerns, and information regarding Accounting Matters (which should include accounting practices, internal accounting controls, or other auditing matters), corporate fraud, or violations of laws committed by the Company or its agents directly to the Audit Committee of the Board of Directors. All such submissions regarding Accounting Matters, corporate fraud, or violations of laws may be made on an anonymous basis and shall be treated as confidential by the Audit Committee. Employees may forward complaints to the Audit Committee anonymously in one of the following manners:
By Email:To Samuel Yen(Chairman of Audit Committee) at email@example.com or zhangzirong at firstname.lastname@example.org; anonymity is preserved when an employee uses a personal email account and his or her identity is not immediately apparent from his or her email address; or
By Mail: To Julia Huang at Room A401-413, GeHua Building, No.1,Black Dragon Alley, Dongcheng District,Beijing, China.
When submitting a complaint, employees are asked to provide the Audit Committee with as much detailed information as possible. Providing detailed, rather than general, information will greatly assist the Audit Committee in effectively investigating complaints. This is particularly important where an employee submits a complaint on an anonymous basis, as the Audit Committee will be unable to contact the reporting employee with requests for additional information or clarification.
The Company is providing these anonymous reporting procedures so that the Company’s employees may disclose genuine concerns without feeling threatened. As detailed below, the Company prohibits retaliation or retribution against any person who in good faith submits a report under this policy. Employees who choose to identify themselves when submitting a report may be contacted by a member or representative of the Audit Committee in order to gain additional information. The Audit Committee will keep confidential to the extent permissible under applicable law all communications with a reporting employee relating to the employee’s complaint.
In addition to providing procedures for employees to submit anonymous complaints regarding the Company’s Accounting Matters, corporate fraud, or violations of law, it is the Company’s policy to adhere to all applicable laws protecting its employees against unlawful discrimination or retaliation as a result of their lawfully reporting complaints or participating in investigations regarding the Company’s Accounting Matters, corporate fraud, or other violations of laws committed by the Company or its agents. In particular, the Company prohibits any form of unlawful discrimination or retaliation or taking any adverse action against employees for engaging in the following conduct:
Employees who believe that they have been subjected to any conduct that violates this policy may file a complaint using the procedures outlined above. Any employee who unlawfully discriminates or retaliates against any employee as a result of his or her protected actions as described in this policy may be subject to corrective action, up to and including immediate termination.
All conversations, calls and reports made in good faith will be taken seriously. When reporting a violation, employees will be asked to provide the time, location, names of the people involved, and other details so that the Company can investigate. As stated above, ChinaEdu prohibits retaliation or retribution against any person who in good faith reports an ethical concern. However, anyone who uses this Code or any compliance program to spread falsehoods, threaten others, or damage another person’s reputation will be subject to disciplinary action up to and including termination.
1.Receipt of Complaint. Upon receiving a complaint regarding Accounting Matters, corporate fraud or violations of law, the Audit Committee member named above will promptly notify the Chairperson of the Audit Committee of such concern or complaint. The Chairperson of the Audit Committee will, depending upon the apparent urgency of the matter, call a meeting of the Audit Committee or add the complaint to the agenda for discussion at the next regularly scheduled Audit Committee meeting. The Audit Committee will acknowledge, when possible, receipt of the complaint to sender.
2. Review of Complaint by the Audit Committee. Every complaint received pursuant to these procedures shall be reviewed by the Audit Committee or its designee to determine whether the concern or complaint raises, or may raise, a material concern about Accounting Matters, corporate fraud or violations of law, and whether the concern or complaint is sufficiently detailed and/or supported by facts or evidence to permit an investigation to be conducted. In conducting this review, the Audit Committee may require the attendance of the Chief Financial Officer, the independent auditor, and/or the person submitting the complaint and such other persons as it deems necessary or appropriate at a meeting of the Audit Committee.
3. Review by Chief Financial Officer. The Audit Committee will request that Chief Financial Officer review complaints received pursuant to these procedures that the Audit Committee determines not to be material, and the Chief Financial Officer shall report his findings and recommendations, if any, to the chairperson of the Audit Committee.
4. Investigation. The Audit Committee or any other committee designated by the Board or their designees (which may include management of the Company) will investigate complaints received pursuant to these procedures that raise, or may raise, a material concern about an Accounting Matter, corporate fraud or violation of law, and that are sufficiently detailed and/or supported by facts or evidence to permit an investigation to be conducted. Where a complaint appears to relate to a material Accounting Matter, corporate fraud or violation of law but is not sufficiently detailed and/or supported by facts or evidence to permit an investigation to be conducted, the party or parties authorized to conduct the investigation by the Board of Directors shall engage in a reasonable effort to obtain sufficient detail and/or factual support to permit an investigation to proceed. In connection with any investigation, the Audit Committee or any other committee designated by the Board may, to the extent it deems necessary or appropriate, retain and consult with independent auditors or legal counsel. Given the nature and seriousness of the issues that may arise in the course of such an investigation, the Company cannot promise anonymity to persons who participate in any investigation.
5. Action Following Investigation. Following the investigation of each concern or complaint received pursuant to these procedures that raises a material Accounting Matter, corporate fraud or violation of law, the Audit Committee or any other committee designated by the Board shall review the results of the investigation and shall communicate its findings and recommendations to the Board of Directors. The Board of Directors shall consider and implement such recommendations, as it deems necessary or appropriate, to address any identified concerns.
6. Record Retention. The Chief Financial Officer or his or her designee shall retain copies of every concern or complaint received pursuant to these procedures, and related investigatory records, for no less than five (5) years following the conclusion of the investigation.
In addition, on at least a quarterly basis the Chief Executive Officer or Chief Financial Officer shall discuss with the Audit Committee or any other committee designated by the Board any reports or complaints they have received regarding actual or potential violations of this Code, Accounting Matters, corporate fraud or violations of law (even if deemed to be immaterial) and any compliance issues regarding this Code, even if there is no ongoing investigation.
This document is not an employment contract between ChinaEdu and its employees, nor does it modify their employment relationship with the Company.
This Code is intended to clarify each employee’s existing obligation for proper conduct. The standards and the supporting policies and procedures may change from time to time in the Company’s discretion. Each employee is responsible for knowing and complying with the current laws, regulations, standards, policies and procedures that apply to the Company’s work.