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Gu Chujun at the the retrial which started at 8:30 am on Wednesday at the SPC"s First Circuit Court in Shenzhen, Guangdong. [Photo provided to China Daily]

The nation"s top court on Wednesday started a public hearing on a high-profile petition involving former business tycoon Gu Chujun.

The case of 58-year-old Gu, former chairman of refrigerator maker Guangdong Kelon Electrical Holdings, is one of the three major controversial cases related to property rights that the Supreme People"s Court has decided to reconsider amid the country"s efforts to better protect the rights of entrepreneurs.

Gu, who once controlled five listed companies and was ranked by Forbes magazine as China"s 20th richest man in 2001, was arrested in 2005 amid accusations of embezzlement of State assets in mergers and acquisitions, as well as falsifying and withholding information of listed companies.

In 2008, Gu was sentenced to 10 years in prison for three crimes-falsely reporting registered capital, falsifying and withholding information and embezzlement-at the Foshan Intermediate People"s Court in Guangdong. He was fined 6.8 million yuan ($1.03 million).

Gu appealed, but the Provincial High People"s Court of Guangdong upheld the ruling in 2009. Soon after Gu"s release in September 2012 when his sentence was commuted, he petitioned the top court to hear the case, insisting on his innocence.

The Supreme People"s Court reviewed his case and decided to consider it at the end of last year. Under Criminal Procedure Law, a retrial can be granted if the original ruling might have been based on insufficient, illegal or contradictory evidence, or if the application of law could be inappropriate.

The retrial started at 8:30 am on Wednesday at the SPC"s First Circuit Court in Shenzhen, Guangdong. No verdict had been released by press time.

"This has oppressed me, and it has ruined a thriving private enterprise," Gu said in court on Wednesday. "It"s a bad case in which the property rights of private entrepreneurs are seriously harmed. All these charges are fabricated and they cannot stand."

In court, however, prosecutors from the Supreme People"s Procuratorate said that evidence in the previous ruling still proves that while registering one of his companies in 2002, Gu falsely reported 660 million yuan of registered capital through fake materials and multiple transactions among accounts he owned.

In response, Gu argued that he followed the registration procedures and the materials he provided were true.

Prosectors also accused Gu of faking the company"s annual report by exaggerating Kelon"s profits between 2003 and 2004, which constitutes the crime of falsifying and withholding information.

But Chen Youxi, one of Gu"s lawyers, said Gu had asked for an annual report "without any exaggeration of profits" from an independent accounting firm. The report offered by the firm, however, was not the one that Gu had sought. Gu accused some local officials in Guangdong of intervening in the accounting process.

As for the embezzlement charge, Gu argued that there were many capital transactions among his companies, but they were normal operations instead of crimes.

Gu"s case has received a great deal of public attention because it has followed the retrial of another business tycoon, Zhang Wenzhong, founder of Wumei Holdings, parent of Wumart Stores.

Zhang was found guilty of fraud, embezzlement and corporate bribery in 2008, but the top court cleared his name in a retrial on May 31 after finding the original ruling was based on insufficient evidence and incorrect application of law.

Legal professionals and entrepreneurs have hailed the new ruling in Zhang"s case as major progress in protecting the legitimate property rights of private businesspeople in China.


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