Illegal money-raising case sent back to lower court for re-sentencing amid outcry over severity of original penalty

This article is more than 8 years old

This article is more than 8 years old

China's supreme court has rejected the death sentence in the case of a tycoon convicted of illegally raising money for her business.

The court ruled on Friday that 31-year-old Wu Ying must return to home province of Zhejiang in south-east China for re-sentencing.

Wu was known for a rags-to-riches story in which she built up a multimillion-dollar business. State media praised her as an example to Chinese female entrepreneurs. But she later was convicted of illegally raising 750m yuan (£75m) from investors in 2005-07.

The original sentence prompted an outcry on internet forums by supporters who said it was too severe given that corrupt Communist Party officials often escape punishment.

All death sentences in China are reviewed by the supreme people's court, but in an apparent effort to mollify public anger, it took the unusual step of announcing it had received Wu's case and would review it "with care".

On Friday, the court said her case would be sent back to the Zhejiang higher people's court.

"I feel relaxed after I saw my daughter Wu Ying's death penalty has not been approved."But I still cannot relax as I do not know the final result. The suffering keeps on going, and I thank you all again," her father, Wu Yongzheng, wrote on the microblog site Weibo.com.

The official Xinhua news agency reported on Friday that the supreme court – noting that Wu admitted her crimes after she was arrested – ruled that immediate execution "may be inappropriate" in the case.

The case has prompted debate over the financial difficulties Chinese entrepreneurs face in raising money in a country where the state-owned banking system channels most lending to state companies.

The communist government has launched a pilot project in Wu's home city of Wenzhou, known for its thriving private enterprises, aimed at making it easier for entrepreneurs to get bank loans.

In March, the Chinese premier, Wen Jiabao, told reporters that the case shows that the development of private lending has not kept up with the economic and social needs of China.

Wen also asked the court to "seek truth from facts".

According to state media, Wu dropped out of school as teenager and began her business empire with a hair salon.

Like many entrepreneurs, she raised money from private lenders outside the government-controlled banking system.

Communist authorities have tolerated underground lending as a way to support entrepreneurs who create jobs and tax revenue. But they began cracking down in recent years, apparently concerned about the large scale of borrowing and the possible involvement of state banks and companies.

Some news reports have said Wu was accused of cheating investors, but details of her case have not been released.