Economist: When Fundraising is a Crime (Punishable by Death)

[Hubbs]

Human rights issues? What human rights issues?

IN THE odd way these things work in China, word has trickled out that on April 7th an appeal court in Zhejiang, a famously entrepreneurial coastal province, conducted a five-hour hearing on a death sentence handed down to Wu Ying, a prominent 29-year-old businesswoman, on fraud charges. Before her arrest Ms Wu had seemed to personify the miraculous business success that could be achieved by people from even the most humble background in modern China.

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If any point is beyond dispute, it is that Ms Wu was a dynamo. She dropped out of secondary school and started a string of beauty parlours whose primary product was the use of animal-placenta injections to achieve the same sort of skin-smoothing effect for which collagen is used in the West. Within a few years she was reported in China Daily to have assembled a business empire that spanned spas, hotels and property. Her net worth was then said to exceed 3.8 billion yuan ($576m).

It all began to crumble when Ms Wu was detained in 2007, but a conviction did not come until December 2009, a particularly long delay that many believed was caused by efforts to broaden the investigation to include other prominent people. Ultimately, she was convicted of “illegal fund-raising” for, the court concluded, raising 773m yuan from illicit sources. In an effort to mitigate her sentence, in the appeal Ms Wu changed her plea from innocent to guilty of “fund-raising fraud”, a lesser charge. Since her initial trial three other people have received long jail sentences in related cases, two of whom had ties to the vast Agricultural Bank of China and one to the Communist Party.

The case struck a nerve across the country, and not just because of the severity of the sentence and the fame of the accused. What she was convicted of was raising and pooling money outside the official system, which is common among Chinese entrepreneurs.

Now, some say she was running a Ponzi scheme (the 80% returns mentioned later in the article certainly seem impossible). And there are rumors about other unethical/illegal business practices. But neither comes close to being worthy of a death sentence.

Three cheers for Communism. :doh: