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Wumart tycoon's conviction thrown out

By Cao Yin | China Daily | Updated: 2018-06-01 10:11
Zhang Wenzhong, founder and former chairman of Wumei Holdings. 

The nation's top court overturned on Thursday a decade-old bribery and fraud conviction of a retail tycoon amid the country's ongoing efforts to rectify wrongful cases and better protect the legitimate rights of entrepreneurs.

Zhang Wenzhong, founder and former chairman of Wumei Holdings, parent of retail chain Wumart Stores, was pronounced innocent as the Supreme People's Court considered the original sentence was based on insufficient evidence and an incorrect application of law.

The top court also ordered the return of Zhang's confiscated properties and his fine of 500,000 yuan ($78,038) that he had paid.

Zhang, now 55, had been sentenced to 18 years in prison for fraud, embezzlement and corporate bribery by a local court in Hebei province in 2008. A second ruling in 2009 upheld the guilty verdict but reduced the sentence to 12 years.

He was released in 2013 after receiving commutations twice in prison. However, Zhang insisted he was innocent and filed constant appeals.

"Upon hearing 'innocent' pronounced, a multitude of feelings surge up in my heart," Zhang told China Daily on Thursday.

"My acquittal reflects the country's progress in the rule of law," he said. "I believe it's a new beginning to fight judicial miscarriages of property-rights-related cases, and the correction will help inject a new dynamic into private enterprises."

Zhang was told to apply for State compensation for the wrongful conviction.

Chen Weidong, a law professor at Renmin University of China, said the acquittal shows the top court's determination to right wrongful convictions and its efforts to protect property rights.

"The overturned ruling contributes to building a sound business environment for entrepreneurs," said Yan Maokun, head of the top court's trial supervision department.

Zhang's case is one of three high-profile cases that the top court decided to rehear at the end of last year after the central leadership reiterated the necessity to better protect the property rights of entrepreneurs.

In the original ruling, Zhang was found guilty of defrauding 31.9 million yuan from a national subsidy. The court's ruling said he knew that private enterprises were not eligible to apply for the subsidy, which was mainly granted to State-owned companies, but he still faked materials to get the money.

The verdict also said while Wumei Holdings bought shares of Taikang Life Insurance Co Ltd from China International Travel Service and Utrust, a Guangdong-based company for wealth management, between 2003 and 2004, Zhang offered bribes to executives of the two corporations to facilitate the acquisition.

Zhang was also found guilty of misappropriating tens of millions of yuan of company money for personal investments in the stock market. Though he later returned the money, the illegal gains were kept.

However, after a careful review of all legal documents, the top court ruled on Thursday that Zhang had not committed the three crimes and the previous rulings incorrectly applied the law.

It said when Zhang applied for the government subsidy, the policy had been changed to allow private enterprises to apply for the money. As for the bribery charge, the top court said the money offered was not to seek illegal profits and the circumstances were not severe, which did not constitute the crime of corporate bribery. In addition, there was insufficient evidence to prove that Zhang misappropriated company money for personal use.

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