China's Supreme People's Court has overturned the death sentence awarded to a well-known entrepreneur who was convicted of illegal fund-raising, following widespread public outcry that turned the spotlight on laws and the financial system.

Thirty-one-year-old Wu Ying, who was once one of China's richest women, was arrested in 2007 after being found guilty of raising as much as 770 million yuan ($122 million) from illegal sources, a widespread practice in the entrepreneurial heartland of southern Zhejiang. Wu's is a rags-to-riches story: starting with one nail salon, she went on to build a $570-million empire that included spas, hotels and real estate.

A Zhejiang court awarded death sentence in her case after she was found guilty of owing investors millions of yuan. The judgment triggered widespread anger, seen as targeting private enterprise and a regression of the judicial system which has been looking to phase out the death penalty for economic crimes. China executes more people than any other country for a range of crimes.

The Supreme People's Court said on Friday the death sentence should not apply in her case, in a statement hailed by lawyers and the media as a victory for public opinion. China's highest court sent the case back to the Zhejiang Higher People's Court for resentencing.

The court did say that “the facts of the case were clear, the evidence was sufficient, and the nature of the crime Wu committed had been determined accurately in the verdicts which were made by lower courts.”

It said Wu “obtained an extremely large sum of money through fraudulent fundraising, causing severe losses to the victims, undermining the national financial order and creating extremely harmful effects”. She spent 10 million yuan ($1.59 million) on clothes, cosmetics and banquet dinners, and also owned four BMW cars and a Ferrari, the court said. It accused her of “flaunting her fortune” to impress investors though she was deep in debt, owing 380 million yuan ($60 million).

Her sentencing nevertheless stirred anger and concern among entrepreneurs and small and medium enterprises, who are often forced to resort to illegal fundraising because of banking restrictions that deny them capital.

Wen's intervention

The outcry even prompted Premier Wen Jiabao to intervene. He promised in March that the case would be handled “carefully”, acknowledging that the government needed to allow private capital to enter the banking sector and make the process more “open”. Since then, Mr. Wen has championed the introduction of reforms in Zhejiang's private financing sector. Ms. Wu's father welcomed Friday's statement as a “relief” in a message on Sina Weibo, a popular Chinese Twitter equivalent. The verdict was welcomed widely on Weibo, described by one journalist as “a victory for public opinion”.

“No tears are shed when an ex-government official is sentenced to die for corruption,” wrote the respected Caixin magazine in an article on Wu.

“Indeed, rarely does a condemned criminal elicit even a gram of public sympathy in China. Which is why the soul-searching and pleas for mercy for death row inmate Wu Ying have been so remarkable, and why her unusual court case is shaking the nation's perceptions of entrepreneur financing and an enormously popular, but thinly regulated, private lending sector.”

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