Court: Wu­mart’s founder doesn’t look back as he beefs up re­tailer

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dis­ci­plinary watch­dog in a case re­lated to then vice-mayor of Bei­jing Liu Zhi­hua. Later that year, as he be­gan to fall into the abyss, Zhang re­signed from Wumei. Liu re­ceived a sus­pended death sen­tence in 2008 for tak­ing about 7 mil­lion yuan in bribes.

Also in 2008, Zhang was sen­tenced to 18 years by the Heng­shui In­ter­me­di­ate Peo­ple’s Court in He­bei prov­ince, but for crimes un­re­lated to Liu’s case.

The ver­dict said Zhang was guilty of de­fraud­ing 31.9 mil­lion yuan from a na­tional sub­sidy, the most se­vere crime of the three charges against him. The court said although Zhang knew that pri­vate en­ter­prises were not el­i­gi­ble to ap­ply for the sub­sidy, which was mainly granted to Sta­te­owned com­pa­nies, he still faked ma­te­ri­als to get the money.

The other two charges were about Wumei’s brib­ing se­nior ex­ec­u­tives of other two com­pa­nies in or­der to fa­cil­i­tate the ac­qui­si­tion of Taikang Life Insurance Co Ltd, and Zhang’s mis­ap­pro­pri­at­ing tens of mil­lions of yuan of com­pany money for per­sonal in­vest­ments in the stock mar­ket. Though he later re­turned the money, il­le­gal gains were kept, the court ruled.

Zhang was also given a fine of 500,000 yuan. The hear­ing, which lasted 16 hours, was not open to public, ac­cord­ing to me­dia re­ports at the time.

Af­ter the first sen­tenc­ing, Zhang started his decade­long ap­peal. In March 2009, the He­bei Provin­cial High Peo­ple’s Court up­held the con­vic­tion, but cut the jail term to 12 years.

“The law ap­pli­ca­tion of the rul­ing was se­ri­ously wrong,” Zhang’s lawyer Zhao Bingzhi has re­peat­edly ar­gued. He said the na­tional sub­sidy never banned pri­vate en­ter­prises, and no one told his client he could not ap­ply for the sub­sidy.

On Thurs­day, the top court ac­cepted Zhao’s ar­gu­ment and said the other two charges could not stand due to in­suf­fi­cient ev­i­dence and the in­cor­rect ap­pli­ca­tion of law.

How­ever, the loss is im­mense to both Zhang and Wumei. With the ab­sence of its founder and soul leader, the com­pany has missed the most dy­namic and fast chang­ing era for re­tail­ers in the coun­try. Its busi­ness has re­mained stagnant for years and it ex­ited from the Hong Kong Stock Ex­change in 2015.

Years be­hind bars

Dif­fer­ent from many aggressive busi­ness­men, Zhang is soft-speak­ing and el­e­gant. No mat­ter for an in­ter­view or to stand trial, he al­ways wore suits and had good man­ners.

Zhang was re­leased in 2013 af­ter getting com­mu­ta­tions twice in prison. Even dur­ing the years be­hind the bars, he did not stop from read­ing and re­search­ing. “Read­ing is what helps me sur­vive the most mis- er­able and help­less mo­ments,” said Zhang, who talked to China Daily in an ex­clu­sive in­ter­view last week.

Mostly, he read English-lan­guage books and said his English has im­proved greatly. He was able to ob­tain four patents in terms of tech­nol­ogy devel­op­ment dur­ing his im­pris­on­ment.

The prison life did not change Zhang’s hard­work­ing mode. He is still strict with him­self and calm when han­dling busi­ness.

“He is a man of ac­tions,” said a man close to him. “He won’t wait for the next day to solve is­sues.”

Hav­ing asked what he thinks of the lost years, Zhang said: “One should not live in the past but in the fu­ture, with ra­tio­nal pur­suit and ex­pec­ta­tions.”

He also ex­pressed grat­i­tude to his en­tre­pre­neur friends who con­stantly vis­ited him in prison and ap­pealed on his be­half.

When Zhang gave a public speech at the China En­tre­pre­neur Fo­rum ear­lier this year for the first time since his im­pris­on­ment, al­most all ex­ec­u­tives and en­trepreneurs stood up and ap­plauded, in­clud­ing Jack Ma, founder of Alibaba Group.

“I’m hon­est with my heart and could face the test of his­tory. I have no re­gret or ha­tred,” Zhang said in the speech. “But I re­quire to thor­oughly rec­tify my wrong­ful case, and my name should be com­pletely cleared.”

Progress of times

Yan Maokun, head of the top court’s re­search of­fice, said the cor­rec­tion of Zhang’s case showed the cen­tral leadership’s de­ter­mi­na­tion to pro­tect rights of en­trepreneurs and their prop­er­ties.

It also re­flected the coun­try’s equal pro­tec­tion in a di­ver­si­fied own­er­ship econ­omy, as well as its en­cour­age­ment of the pri­vate econ­omy, the high­light of the rule of law and the re­spect to hu­man rights, he said.

“Jus­tice is some­times late, but will never be ab­sent,” Yan said.

“Cor­rect­ing mis­car­riages in Zhang’s case is also to re­move im­proper reg­u­la­tions on the nonpublic econ­omy, elim­i­nate bar­ri­ers for its de­vel­op­ments, en­sure fair com­pe­ti­tion in the mar­ket, cre­ate a sound busi­ness en­vi­ron­ment and in­ject dy­namism into pri­vate en­ter­prises.”

Prop­erty pro­tec­tion has been ef­fec­tively strength­ened since the 18th Na­tional Congress of the Com­mu­nist Party of China in late 2012. In 2016, the CPC Cen­tral Com­mit­tee and the State Coun­cil is­sued a guide­line on bet­ter pro­tec­tion of prop­erty rights in an ef­fort to shore up so­cial con­fi­dence and pro­mote so­cial jus­tice.

The guide­line re­quires gov­ern­ments at all lev­els to in­sist on the equal, com­pre­hen­sive and le­gal pro­tec­tion of prop­erty rights and also stip­u­lates the nonpublic econ­omy can­not be vi­o­lated.

In 2016, the na­tion’s top court also urged all courts to ur­gently re­view prop­er­tyrights-re­lated dis­putes dat­ing to 1978 and to pay at­ten­tion to the court rul­ings in which pri­vate en­ter­prises were found to en­gage in mis­con­duct.

A doc­u­ment re­leased af­ter the an­nual Cen­tral Eco­nomic Work Con­fer­ence, on Dec 20, which set the tone for China’s eco­nomic poli­cies this year, also asked for the re­view and for courts to rec­tify some con­tro­ver­sial prop­erty rights dis­putes that have raised so­cial ten­sions.

A week later, the top court an­nounced the re­trial of three ma­jor cases linked to prop­erty rights, in­clud­ing Zhang’s case. The other two are re­lated to Gu Chu­jun, for­mer chair­man of Guang­dong Kelon Elec­tri­cal Hold­ings Co, and an equity trans­fer dis­pute.

Chen from Ren­min Univer­sity, who has been fol­low­ing Zhang’s case closely, said the re­tailer’s new in­no­cent ver­dict “is the best im­ple­men­ta­tion of the cen­tral leadership’s re­quire­ments to in­crease ef­forts to pro­tect prop­er­ties and rights of en­trepreneurs”.

The case is also an ex­am­ple for grass­roots courts, “show­ing how to hear such a case in reg­u­lated ways”, he said.

Pri­vate en­ter­prise con­trib­utes much to the econ­omy in taxes and com­merce, “but we have to ad­mit we failed to re­al­ize or even look down on its value and sig­nif­i­cance in the past,” Chen said.

Zhou Guangquan, the law pro­fes­sor from Ts­inghua Univer­sity, said Zhang’s case should also point to the mis­un­der­stand­ing of laws, be­cause “judges at that time might not have dis­tin­guished eco­nomic dis­putes from eco­nomic crimes”.

He said such a wrong­ful ap­pli­ca­tion of laws in hear­ing prop­erty-rights-re­lated cases may not be rare in courts in the past due to a lack of ju­di­cial ex­pe­ri­ence.

“To avoid such wrong­ful con­vic­tions, courts must over­come in­ter­fer­ence from lo­cal gov­ern­ments and im­prove the ac­cu­racy of law applications,” he said. “We can­not make new wrong­ful judg­ments while over­turn­ing con­vic­tions wrongly made in the past.”

Look­ing ahead

While the coun­try is mov­ing for­ward to bet­ter pro­tect the prop­erty right of busi­ness­peo­ple, Zhang also is look­ing for­ward — for him­self and for Wumei.

Tech­nol­ogy has al­ways been a driver for Zhang’s busi­ness. “I could have be­come a pro­gram­mer and got in­volved with e-com­merce,” Zhang said jok­ingly. “I was in re­tail by chance.”

Hum­ble and cau­tious about Wu­mart’s ex­pan­sion plans, he is still a fighter in the in­dus­try.

Ear­lier this year, Wu­mart ac­quired 21 Lotte Mart stores in Bei­jing from the Re­pub­lic of Ko­rea’s Lotte Shop­ping for about 248.5 bil­lion won ($230.2 mil­lion). Wu­mart now has more than 1,000 stores in North, East and North­west China, and the re­tail gi­ant has earned rev­enue of more than 50 bil­lion yuan as it con­tin­ues to march into north­east­ern and south­ern re­gions.

“For me, my mis­sion is to con­tin­u­ously im­prove dig­i­tal re­tail­ing, up­grade the uni­fi­ca­tion of on­line-and-off­line ex­pe­ri­ences, pro­vide safe and fresh food for so­ci­ety and pro­vide a bet­ter in­come for Wu­mart’s em­ploy­ees,” Zhang said.

“Per­sis­tence mat­ters,” he added. “Plus a pos­i­tive at­ti­tude and be­lief in jus­tice.”

XU LIXIN / XINHUA

Zhang Wen­zhong, founder and for­mer chair­man of Wumei Hold­ings, is pro­nounced not guilty at the Supreme Peo­ple’s Court on Thurs­day, re­vers­ing a decade-old ver­dict.

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