May 31, 2018 / 6:00 AM / in 24 days

In rare reversal, China court overturns magnate's decade-old graft conviction

BEIJING/SHANGHAI (Reuters) - China’s top court has overturned a decade-old ruling that sent a major retail magnate to jail for bribery and fraud, a rare high-profile reversal that comes as other executives battle corruption charges.

Zhang Wenzhong, founder of major retailer Wumart, was innocent, the People’s Supreme Court said in a statement on Thursday, quashing a guilty verdict for which he received an 18-year jail term ten years ago.

The decision demonstrates the ruling Communist Party’s resolve to strengthen protection of property and entrepreneurs’ lawful rights and interests, the court added on its microblog.

The reversal is one of the most notable in China, where conviction rates historically are close to 100 percent, and follows a lengthy appeals battle since Zhang was released early in 2013.

It comes amid a fierce crackdown on corruption and corporate bad behavior under Chinese President Xi Jinping that toppled a string of key executives and government officials.

In one of the most high-profile of those, Wu Xiaohui, the former chairman of Chinese insurance giant Anbang Insurance Group Co [ANBANG.UL], is appealing a conviction for fraud and embezzlement that brought him a sentence of 18 years in prison, his lawyers told Reuters on Thursday.

Also swept up in the crackdown on the corporate sector is the chairman of CEFC China Energy, a private firm that had been chasing a $9.1-billion stake in Russian oil major Rosneft.

In its statement, the supreme court said there was no evidence Zhang had appropriated funds for his own benefit, adding that earlier rulings had “made errors”.

It cleared Zhang of forging documents to swindle subsidies related to government bonds. A payment of 300,000 yuan ($46,864) to someone who helped Wumart in an acquisition was remuneration for services, rather than bribery, it added.

In 2008, a court in the northern province of Hebei sentenced Zhang to 18 years in prison, which was later reduced to 13 years. A higher-level Hebei court rejected an appeal in 2013 after Zhang’s early release.

Reporting by Pei Li and Adam Jourdan; Editing by Clarence Fernandez

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