Wu Ying is escorted by police to the first trial at the intermediate people's court in Jinhua, Zhejiang Province on April 16, 2009. Photo: CFP

Zhejiang higher people's court Tuesday defended their sentencing of Wu Ying, founder of the Bense Group, to death for financial fraud earlier this January.

Wu Ying, a business woman who rose from a humble background to build a business empire that included spas, hotels and property, was sentenced to death for "illegal fund-raising," or pooling money outside the official banking system in December of 2009.

Wu tried to mitigate her sentence by changing her plea from innocent to guilty of "fund-raising fraud," a lesser charge but failed, and the higher court upheld the decision on January 18.

Harsh sentence explained

Faced with surging sympathy and questions over the severity of this sentence, Shen Xiaoming, the chief justice at Zhejiang Provincial Higher People's Court, told the media that Wu Ying had concealed the fact that her companies were in debt and produced many false advertisements so as to defraud the public of some 380 million yuan ($56 million).

The court held their ruling as the current law stipulates that anyone who illegally raises funds over the amount of 1 million yuan should be sentenced to death, China News Service yesterday quoted Shen as saying.

Zhang Yanfeng, Wu's defense lawyer, disagreed with Shen's statements and believes Wu did not commit a crime deserved of the death sentence, and that she is in fact innocent.

According to Zhang, for a crime to constitute fraud two things must happen. First, the suspect must acquire the funds with the intention of keeping them for personal use, but he said this was not true as Wu used the money to establish companies.

Second, the illegally obtained funds must be obtained by somehow cheating those involved, which he said is not true for Wu as she only borrowed money from 11 people, and most of them were acquaintances of hers.

"Although the amount of money Wu borrowed is high, it is still too harsh to sentence her to death," Zhang told the Global Times yesterday.

Shen further stated that although Wu borrowed money from 11 people, more than 120 residents from Dongyang, Yiwu, Fenghua, Lishui and Hangzhou also became victims of the fraud in the case.

"The current law stipulates that only if the number of borrowers exceeds 30 can the accused be regarded as borrowing money from the public," said Zhang.

Underdeveloped sector

Many celebrities, such as Ren Zhiqiang and Pan Shiyi, famous real estate developers, Li Kaifu, former Google China chief and Wang Wei, an official at the Chinese Museum of Finance, have been questioning the sentence on the Internet recently.

"It is so ridiculous to sentence Wu Ying to death," Xu Xin, a law professor at the Beijing Institute of Technology, wrote on his microblog. "Wu should not be sentenced to death before the financial system is completed."

Many are complaining that the current system should share certain responsibilities for illegal underground banking that are caused by the incomplete financial system, and makes it hard for private enterprises to raise capital through official channels.

"The sympathy directed toward the illegal fundraiser has largely come out of discontent over the underdeveloped financial sector," said Qian Shuitu, head of the school of finance at Zhejiang Industry and Commerce University.

He said that although it has been over 30 years since China started implementing market economic policies, the country's financial market has yet to become fully open.

Coastal Zhejiang has long been known as a hotspot for up-and-coming entrepreneurs. Private enterprises took off in the 1980s, when China implemented market economy reforms. Private businesses have become a pillar of the prosperous local economy, accounting for about 70 percent of the region's gross domestic product and providing 90 percent of its jobs.

Chen Jun, an official at the Zhejiang Chamber of Commerce in Beijing, agreed. He said that as a private entrepreneur, Wu Ying contributed to the economic development of her hometown, so she should not be sentenced to death.

He also said that more than 95 percent of business people in Zhejiang are loaned funds from others.

Whistle blown

According to earlier media reports, several officials from Dongyang were implicated by Wu after she was sentenced to death in her first trial in 2009. Online posts also said a dozen local officials had pushed local judiciaries to sentence Wu to death, according to the China News Service.

Shen confirmed that Wu implicated many officials as being corrupt while in jail, adding that this action would be considered as part of her confession to offering bribes, rather than her chance for a lighter sentence. He however denied that they received any messages from officials pushing for Wu to receive the death sentence.

"Two officials among the seven, namely Li Tiangui, a former vice director of the standing committee of the People's Congress of Jingmen, Hubei Province, and Zhou Liang, a former deputy head of the Agricultural Bank of China Jingmen branch, have been found to commit corruption crimes," Zhang told the Global Times.

"I hope the Supreme People's Court will rule fairly in Wu's case, and I am looking forward to this," Zhang added.