Artist Ai Weiwei loses challenge in Chinese tax evasion case

Activist artist Ai Weiwei believes a tax evasion case was meant to intimidate him, but losing his challenge to the $2.4 millionUS fine Friday did not silence his criticism of China's government.

"Today's verdict means that after 60 years of the founding of our nation, we still lack the basic legal procedures, the truth is not respected, and they do not give taxpayers or citizens any rights to defend oneself," Ai told reporters at his Beijingdesign studio, where he stayed because police told him he was not allowed to attend the hearing.

"The whole legal system is in a dark state right now."

Ai and his supporters interpret the penalty Beijing tax authorities levied on his design company last year as official retaliation against his activism. He paid the guarantee in part with donations via wire transfers or from supporters who stuffed cash into envelopes or wrapped bills around fruit and threw the items into his yard.

An internationally known sculptor, photographer and installation artist, he has used his art and online profile to draw attention to injustices in Chinese society and the need for greater transparency and rule of law.

He wasdetained without explanation for three monthslast year during an overall crackdown on dissent. Following his release, Beijing Fake Cultural Development Ltd, was ordered to pay 15 million yuan (about $2.4 million US) in back taxes and fines. The company filed a lawsuit accusing the tax bureau of violating laws in handling witnesses, gathering evidence and company accounts.

Heavy security as verdict announced

On Friday, the Chaoyang District People's Court announced its verdict amid a heavy security presence, as plainclothes and uniformed police blocked roads and forced reporters and diplomats to leave the area.

The court rejected the lawsuit on the grounds that the reasons given by the design firm in seeking to have the tax penalty revoked did not hold water, according to a copy of the verdict seen by The Associated Press.

The court said, for example, that the company was wrong in arguing that financial accounts seized from Ai's studio by police should not be used as evidence in the tax authority's investigation against the firm. It said tax investigators are allowed to use information sent to it by other departments or organizations.

Attorney Pu Zhiqiang, who attended the hearing with Ai's wife, Lu Qing, who is the company's legal representative, said the ruling was made "totally without reason." Pu said the company would appeal the ruling.

"We have lost this lawsuit but we believe that our action in reality can serve as a symbol of the awakening of civil consciousness," Pu said. "We do not recognize the legality of the ruling."

Supporters waited nearby

About a dozen supporters waited at a nearby intersection for the verdict. Tax lawyer Du Yanlin, who advises Ai, wore a grey T-shirt with the artist's name printed on it in bold characters and was prevented by police from getting close to the courthouse.

'Through this lawsuit we can clearly recognize what condition the Chinese judicial system is in. We can more clearly understand what Ai Weiwei's situation is...He still has no freedom. He still can't have justice' Du Yanlin, tax lawyer

Du said the court's ruling was no surprise.

"Through this lawsuit we can clearly recognize what condition the Chinese judicial system is in. We can more clearly understand what Ai Weiwei's situation is," Du said.

"He still has no freedom. He still can't have justice."

Before his own detention last April, Ai publicized fellow activists' disappearances via Twitter and he has spoken out about a number of national scandals, including the deaths of students in shoddily built schools that collapsed during the 2008 Sichuan earthquake, children killed or sickened by tainted infant formula and a deadly high-rise fire in Shanghai that killed 58 people and was blamed on negligent workers and corrupt inspectors.

Since being released, Ai has been refused permission to travel and is under constant surveillance. He still frequently criticizes the government on Twitter, which is blocked in China but accessible to tech-savvy citizens.

China says he remainsunder investigation on suspicion of illegal exchange of foreign currency and pornography.The latter allegation is believed to be linked to satirical online photos of him posing naked with four women who are topless.