At the beginning of the 21st century, a wave of property rights reform was prevalent in state-owned enterprises (SOEs) in sectors not serving the lifeblood for national economy, with these SOEs turning themselves into joint-equity enterprises or private enterprises. Since 2008, protests against corruption in the course of SOE reform arose, prompting the judiciary to launch criminal investigations into dominant players. Media reports showed that the majority of the cases ended up with the accused sentenced severely on corruption charges.
 
Mr. Yang, formerly chairman and general manager of a commercial enterprise in Huairou County, Beijing, was charged of embezzling 20 million yuan of state-owned assets and misappropriating 350, 000 yuan of public funds in the reform between 2000 and 2001. These illicit gains were allegedly obtained by fabricating retirees’ medical expenses to offset net assets of the enterprise, concealing facts of property to mislead appraisal agencies to undervalue the assets, and transferring state-owned land property to the post-reform enterprise for free. When the case was first tried, Beijing Second Intermediate People’s Court sentenced Yang to life imprisonment for embezzlement and ten years in jail for misappropriation, leading to a concurrent sentence of life imprisonment. The court also ruled that Yang’s 200 million yuan of property should be confiscated as illicit gains. Yang appealed to Beijing High People’s Court as he refused to accept the first-instance judgment.
 
Dacheng senior partner and criminal defense attorney Xu Ping, entrusted by Yang and his family, represented the defendant in the second trial. Attorney Xu, following thorough communication with the parties and a careful analysis of files, concluded that the case was a typical miscarriage of justice in which achievements of reform were totally denied due to operational and procedural flaws. Besides, the judicial authorities obviously failed to understand what were to be addressed in SOE reform, nor the theory or practice of reform.
 
To bring back the actual circumstances in which the reform was undertaken, attorney Xu made quite a few visits to Huairou County where he managed to collect 25 pieces of evidence including witness statements, written evidence and policy documents. Based on the evidence, Xu wrote detailed analysis reports and letter of defense in which three arguments were put forward: firstly, the reform led by the defendant was directly under the guidance of the county government, who must have known and permitted the procedural flaws; secondly, when the state-owned assets were first disposed of, the defendant was not a shareholder of the post-reform enterprise, thus ruling out his intention of committing corruption; thirdly, the defendant obtained the overwhelming stake of the enterprise by means of post-reform equity transfer that had little to do with the reform itself. Xu also noted that at the time of reform there was a temporary vacuum of laws or regulations and consequently discrepancies existed in interpreting relevant policies among local governments. He defined the reform as an experiment through trial and error. In his opinion, it was due to procedural loopholes if any error occurred. Therefore, the local governments who ushered in the reform, rather than the reformers, should be held responsible. Only in this way could we protect people’s enthusiasm for reform, boost their entrepreneurship, and ensure economic reform bear more fruits in the future.
 
Attorney Xu handed in the collected evidence and written opinions to Beijing People’s Procuratorate and Beijing High People’s Court respectively and communicated his opinions to people in charge of the case quite a few times. In early July, the case went through a public trial at Beijing High People’s Court. During the trial, public prosecutors from Beijing People’s Procuratorate accepted the defense lawyer’s claim that charges of corruption against the defendant did not hold for lack of sufficient evidence and suggested court of second instance quash the original judgment. At the end of July, Beijing High People’s Court declared the first trial judgment untenable and ordered a retrial as the prosecution and defense sides could not agree on the charge of 350,000 yuan of public fund misappropriation.
 
When the court of second instance pronounced its judgments, Yang the appellant was too excited to contain himself and burst into tears.
 
The case was successfully defended because the defense attorney was able to conduct comprehensive investigations and thorough communication with the judiciary, which enabled them to gain a full picture of SOE reform. In addition, when conflicts around the interpretation of policy arose, the principle of favoring interpretations conducive to the defendant was also observed, leading to compromise and concession in the course of rebuttal between the prosecution side and the defense side. The result of the second trial not only showed that the defense attorney had fulfilled his duty satisfactorily, but also signaled the judiciary’s effort of implementing the principle of “respecting defense attorney’s opinions”.