China: Death penalty in fraud crimes divides public

Wu Ying, the businesswoman sentenced
to death for cheating investors

The death sentence verdict of a female billionaire, who cheated investors out of several hundred million yuan through illicit means of financing, has sparked heated public debate, with observers calling for a relaxation of limits on informal lending by authorities.

The Zhejiang Provincial Higher People's Court Wednesday upheld the death penalty for Wu Ying, the 31-year-old former owner of the Bense Holding Group.

Wu, born to a farmer's family, was the sixth-richest woman in the Chinese mainland in 2006, with total assets of 3.6 billion yuan ($569.99 million), according to the Hurun Report. She was arrested in 2007 for illegal fundraising and fraud.

In December 2009, she was sentenced to death by the Jinhua Intermediate People's Court for cheating investors.

Wu raised 770 million yuan by promising high returns to investors between May 2005 and February 2007, the intermediate court found. She still had 380 million yuan as well as a large amount of unpaid debt with creditors when the case was uncovered.

According to the media, in order to get a lenient sentence, Wu had accused 17 officials and bank executives during her detention, many of whom have been convicted.

In a ruling, the Zhejiang Higher People's Court said Wednesday that it rejected Wu's appeal as Wu "brought huge losses to the nation and people with her severe crimes, and should therefore be severely punished."

The wrongdoing of officials unmasked by Wu came about as results of her bribery, which cannot be viewed as a contribution to the discovery of these crimes, the court said, rejecting Wu's plea for leniency.

The death sentence is still subject to review by the country's Supreme People's Court. So far, relevant authorities have not released the complete list of officials exposed by Wu.

According to the Oriental Morning Post, Wu Hong, a law professor at the East China University of Political Science and Law, explained that China has a relatively tight control over finance, and the fraud case has brought society a lot of harm.

"Such fraud always involves a lot of people, and it is usually impossible to recover these losses," Wu Hong said.

Chen Tao, a lawyer with the Criminal Law Committee under the Beijing Lawyers Association, told the Global Times that there is a trend of local courts handing out harsh punishments to illegal fundraising offenders as a warning to others.

On Saturday, the Anyang Intermediate People's Court in Henan Province handed down a life sentence to 41-year-old Liu Hongfei, who raised more than 85 million yuan by promising high returns to lenders between 2005 and 2011.

However, many people called for leniency to be shown to Wu Ying.

Some microbloggers showed sympathy for her, saying that the crime she committed was not severe enough for a life sentence.

Chen shared a similar sentiment, citing that Wu Ying had turned in several other offenders, and the Supreme People's Court had issued a notice asking local courts to be cautious in deciding on the death penalty.

He also said that the capital sentence should be abolished for economic offences that pose no threat to personal safety.

"The law should protect people's basic rights which definitely include the right to life, and that right cannot be measured by any economic losses as long as the offence has not caused any casualties," Chen said, adding that it was also time to abolish the crime of illegal fundraising in the Criminal Law.

A commentary on sohu.com said many people had hoped that a pardon to Wu Ying's death sentence would signal the recognition of informal lending by authorities.

According to a survey by the China Oriental Culture Broadcast Institute (COCBI), which was carried out among 1,206 businesses during last autumn, 42.7 percent admitted that they had used informal lending, with 55.6 percent of those involved hailing from Zhejiang.

Bai Chengyu, secretary-general of the China Association of Microfinance, said that illegal fundraising became a prominent issue last year due to the government's tight control on credit to curb inflation.

"What's more, the China Business News commented that the flourishing of 'underground finance' came as a result of banks' preference to give loans to State-owned enterprises, thereby setting higher thresholds for private enterprises."

Bai said there is still insufficient government supervision over private financing despite its long existence.

In the coastal city of Wenzhou, nearly 100 local tycoons reportedly fled abroad to avoid repaying their debts, which had accumulated to more than 10 billion yuan in bank loans or shadow loans last year.

In Anyang, about 30,000 people gathered at the local train station on New Year's Day to protest against an insufficient crackdown on illegal fundraising, after an investment guarantee company reportedly disappeared with about 40 billion yuan collected from locals.

According to the COCBI survey, 73.6 percent of respondents viewed informal lending positively, and 40.3 percent believed it should be monitored by authorities.

Source: People's Daily Online, January 20, 2012