Top court increases legal protections for firms

Guideline stresses rectifying mistakes made in case handling as urgent matter

China's top court released a guideline ordering Chinese courts to provide stronger legal protections for private businesses and entrepreneurs.

The guideline, released by the Supreme People's Court on Tuesday, requires lower courts to not resolve economic disputes with criminal punishments and to quickly rectify wrongful convictions should they be discovered.

"Overturning wrongful rulings and correcting judicial miscarriages in case handling shows our determination to uphold justice, and it also helps build a sound business environment," said Hu Shihao, head of the top court's Trial Supervision Tribunal.

He made the remark at a news conference while introducing the guideline to the public on Tuesday, and disclosed a series of cases where entrepreneurs had fallen foul of the law and been punished, only to later be acquitted due to insufficient evidence.

One such case involved Meng Bingxiang, owner of an automobile parts company in Jiangsu province, who was detained by police on suspicion of illegal business practices in October 2011. The local tax authority issued a fine, requiring Meng to pay 220,000 yuan ($30,000) in tax that he had evaded.

However, Meng was unaware of the fine because he was under detention at that time. Despite this circumstance, he was sentenced to two years in prison with a three-year reprieve by a court in Huaian district for tax evasion.

The sentence prompted prosecutors in Huaian city to appeal, and after a review, the intermediate people's court in the city appointed a court in Hongze district to retry the case.

In 2021, the Hongze court overturned the original verdict and pronounced Meng not guilty after a retrial, pointing out that the original ruling had been made based on the wrongful application of laws.

Under the Criminal Law, people cannot be given criminal penalties if they have already been fined by administrations due to tax evasion, according to the Hongze court.

In another case, the top court acquitted Zhang Wenzhong, founder and former chairman of Wumei Holdings, parent of retail chain Wumart Stores, after a retrial in June 2018, noting that the original conviction and sentence given to Zhang were made based on insufficient evidence.

Ten years ago, Zhang received 18 years imprisonment for fraud, embezzlement and corporate bribery.

"Such retrials have released a strong signal for protecting the legitimate rights and interests of private entrepreneurs, meaning that our courts have taken actions to resolutely correct judicial errors in line with the law," Hu said.

The guideline also states that those who use the internet, social media platforms or publications to denigrate, disparage or vilify private enterprises and entrepreneurs should be severely punished.

It requires courts nationwide to help solve the financial difficulties of some private businesses by efficiently dealing with their disputes.

From January to September this year, Chinese courts accepted 19,797 bankruptcy cases, 11,517 of which have been concluded, Lin Wenxue, chief judge of the top court's No 2 Civil Adjudication Tribunal, revealed on Tuesday.

"More than 1,000 private companies survived their financial problems during the period, thanks to courts' restructuring and reconciliation in case handling," he added.