Unlike in the USA, A billionaire girl can be setenced to death in China

Bloomberg News

Wenzhou, epicenter of China’s fight with gray lending.

Associated Press

In this photo taken on Saturday April 16, 2009 and made available on Tuesday April 19, 2011, Wu Ying, head of the Bense Holding Group, stands on trial for allegedly raising over 390 million yuan by promising high returns to her creditors at the intermediate people’s court in Jinhua in eastern China’s Zhejiang province.

Gray lending is finding itself in the spotlight in China as the country’s top judges weigh the death penalty for a 31-year-old billionaire accused of illegally raising 770 million yuan ($122.2 million) and defrauding investors.
Wu Ying’s story has captivated China’s blogosphere for more than two years, especially as the final chapter appears to loom for a farmer’s daughter who became China’s sixth-richest woman, then lost it all in a swirl of investments gone awry and accusations of governmental vengeance after she allegedly implicated some high-level officials during police investigations.
Turns out, though, that Ms. Wu’s case isn’t isolated as an emblem for what’s going on in the world of lending outside China’s officially regulated credit institutions.
CLSA Asia-Pacific in a report Tuesday detailed scores of “runaway bosses” – company leaders who absconded with unpaid debt – in the last six months. A handful appear to exceed Ms. Wu in terms of the amount of money they absconded with, including four cases listed with debts of more than 1 billion yuan.
The difference, as Ms. Wu’s defenders have asserted (in Chinese here), is that she didn’t run away.
“The scope of private lending is reportedly well over 500 billion yuan just for Wenzhou… and 1 trillion yuan for Shanxi province,” CLSA said, citing a housing ministry report. The worst offender, according to CLSA, which based its list on Chinese media reports: the head of Nanjing-based Yuyang Metal, who is reported to have run off with debts totaling several billion yuan.
The bosses of Ningbo’s QXQ Technology (more than 2 billion yuan) and Wenzhou’s Xintai Glasses (2 billion yuan) finished second and third, respectively.
Both Ningbo and Wenzhou are cities in Ms. Wu’s home base of Zhejiang, an eastern province with a culture of entrepreneurship and a stronghold of the sort of small-and-medium businesses that often lose out to China’s massive state-owned corporations in easily obtaining loans. Wenzhou is heavily represented in CLSA’s list of runaway bosses, weighing in with nine out of 22. Two companies on the list are from the cities of Leqing and Ruian, also in Zhejiang.
Some analysts speculate that the government may have ordered the death sentence on Ms. Wu precisely because she’s symptomatic of a destabilizing financial problem that’s potentially far larger than officially let on. It’s a problem made worse, they say, by a lack of investment instruments and limits on the Chinese people’s ability to invest in overseas regulated markets.
For now, the chatter in the local media and among bloggers is focused on guessing whether the government may pardon the woman who in the last two months has become arguably China’s best-known celebrity convict (in Chinese). But the coda on Ms. Wu’s case may signal just how heavily the government will crack down on a more elusive target: the gray lending market in China.
–Chuin-Wei Yap and Tom Orlik


http://blogs.wsj.com/chinarealtime/2012/02/15/life-and-death-chinas-runaway-bosses/