Facts

A established Companies C and Y and was the actual controller of both. Through leaflets and telephone solicitation the companies publicly promoted a construction project, attracting investors to lend funds under “Personal Loan Consultation and Service Agreement” and “Partnership Agreement” documentation. The amount involved was RMB 210 million.

First Instance

The trial court convicted A of illegally absorbing public deposits and imposed a heavy sentence, treating A as the organiser and the full amount as the loss.

Appeal

Li Xiaohua acted for A on appeal. The grounds were that a substantial part of the funds had been repaid before the investigation; that certain investors were long-standing business contacts rather than members of the public; that the project had real assets behind it, which bears on the assessment of loss and of subjective intent; and that A’s cooperation and the recovery of assets had not been given adequate weight.

Outcome

The appellate court accepted these submissions and varied the judgment, reducing the sentence.