Apex court throws out tycoon’s conviction

Retail magnate acquitted of state subsidy fraud

BEIJING: China’s supreme court has thrown out a retail tycoon’s fraud conviction in an unusual show of leniency toward entrepreneurs amid a string of high-profile detentions that has rattled the Chinese business world.

Zhang Wenzhong, former chairman of one of China’s biggest retail chains, Wumart Stores Inc, was released in February after serving 12 years in prison on charges that included improperly obtaining technology development subsidies.

The Supreme People’s Court ruled that while Zhang, a computer scientist who studied at Stanford University and founded Wumart in the 1990s, violated rules in applying for the subsidies, he did so unintentionally and his company was eligible to receive them.

Zhang and another executive who was convicted had no “subjective intention” to commit fraud, the court said.

It said their conviction was a “misapplication of the law and should be corrected”.

Yesterday’s ruling was a rare success by a high-profile defendant in the midst of a marathon anti-corruption crackdown led by President Xi Jinping.

It reflected the ruling Communist Party’s desire to “strengthen the protection of the legitimate rights and interests of entrepreneurs,” said a Supreme Court official quoted by the website of the Shanghai newspaper The Paper.

In a possible effort to reassure entrepreneurs about their status in the state-dominated economy, the unidentified official acknowledged they face uncertainty about evolving rules and sometimes need to make unorthodox arrangements.

“In some places, there has been an unfair and unreasonable treatment of private enterprises,” the official was quoted as saying.

The official said when authorities find “irregular practices” they should be examined in a “developmental perspective”.

A series of Chinese businessmen had been prosecuted or detained for questioning since 2016 about possible offences including fraud, embezzlement and bribery.

The supreme court also overturned Zhang’s conviction on charges he and other investors improperly used 40 million yuan (RM24.4mil) from a customer’s account at an insurance company to trade stocks. — AP