Actress will not face charges in case touted as start of a tax-cheat crackdown

Her case was trumpeted as a loud warning - to the rich and famous - that the government would no longer tolerate blatant tax evasion, but actress Liu Xiaoqing will not face charges.

In a high-profile case that was touted as the beginning of a crackdown on tax cheats, Liu was arrested in July 2002 and spent 14 months in custody.

Investigators had said she personally evaded 130,000 yuan in taxes, and her companies - the Beijing Xiaoqing Culture and Arts Company and Beijing Xiaoqing Real Estate Company - had evaded more than 14.5 million yuan in taxes since 1996.

But yesterday a Beijing court issued a notice saying that no charges would be pressed personally against Liu. All of the blame for the tax evasion has been placed at the feet of her general manager.

Last month her companies were fined a total of 7.1 million yuan, and her brother-in-law, Jing Jun , was sentenced to three years in jail for tax crimes. At the trial, the Beijing Chaoyang Court said that Jing, general manager of the Beijing Xiaoqing Culture and Arts Company, had falsified the company's books by inflating its expenditures and suppressing income.

Yesterday, Liu's lawyer, Li Xiaolin, said he did not expect Liu to file for compensation for the time she has spent in custody.