National Post (Latest Edition)

Chinese tycoon’s conviction thrown out

- Joe McDonalD

BEIJING• China’ s supreme court threw out a retail tycoon’s fraud conviction on Thursday in an unusual show of leniency toward entreprene­urs amid a string of highprofil­e 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 conviction­s were a “misapplica­tion of the law and should be corrected.”

The 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.

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 businesspe­ople have been prosecuted or detained for questionin­g since 2016 about offences including fraud, embezzleme­nt and bribery.

On Wednesday, a lawyer for the imprisoned founder of China’s biggest privately owned insurance company said he will appeal an 18-year prison sentence on fraud charges. Wu Xiaohui of Anbang Insurance, which owns New York City’s Waldorf Hotel, was convicted of improperly raising billions of dollars from investors and diverting company money to his own use.

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