Authorities in the Chinese capital have revoked the business license of a company that manages the cultural activities of outspoken artist Ai Weiwei, in a move which could resolve an ongoing standoff over a tax fine.
Ai's Fake Cultural Development Ltd, which is in his wife's name, would no longer be able to continue trading, and may now not be required to pay the fine.
Ai, 55, lost his final court appeal last week against a U.S.$2.4 million tax evasion fine and had said he will not pay the remainder of the penalty.
Beijing's No. 2 Intermediate Court upheld the fine that was levied against Fake Cultural Development last year in a penalty the artist has long considered political retaliation against his social activism.
Ai confirmed in an interview with RFA's Cantonese service that Fake Cultural Development's license had been revoked, but then said he needed to consult with his legal team before commenting further.
"To be honest, I don't really understand it," he said shortly after the announcement.
"I will have to ask my lawyer, because I don't think it's very clear."
Ai's lawyer Pu Zhiqiang said Ai's wife Lu Qing had already lodged an objection to the decision by the Chaoyang district bureau of commerce and industry to revoke Fake Cultital Development's business licence
"The company owner Lu Qing has lodged an objection, and we will have to proceed step by step now," Pu said.
"If there's a hearing, we'll attend. If we need to file a lawsuit, we'll do so," he said.
Pu said the authorities had revoked the license because the company had failed to comply with business licensing regulations.
"The time that the industry and commerce bureau should have dealt with Fake's license renewal was right in April , when Ai Weiwei and a lot of other company employees...were detained," he said.
"At that time, all of the company's records, including its seal, were out of its hands," Pu said. "I think this had an effect on the bureau's ability to renew the license."
Ai's mother Gao Ying said the authorities had behaved unreasonably throughout the tax evasion case.
"All of Fake's accounts and its seal were taken away in April last year and they still haven't been returned," Gao said.
"This is completely unreasonable," she said. "The whole world understands what is going on here; that this is all a big excuse."
Retired Shandong University professor Sun Wenguang said the Chinese government frequently used charges of tax evasion and other economic crimes to target its critics.
"Ai Weiwei is a public intellectual in China, and has expressed different views on a whole range of issues, so the authorities are making life hard for him," Sun said.
"They are forcing his company to close, with the excuse that it didn't go through the licensing process."
He said the authorities use similar tactics to withhold business licenses from rights lawyers who represent cases deemed sensitive by the ruling Chinese Communist Party.
"They did the very same thing to [jailed rights] lawyer Gao Zhisheng," Sun said. "They revoked his license so that he couldn't take cases and couldn't feed himself."
Gao Zhisheng, one of China's highest-profile dissidents, is serving a jail sentence at the Shaya county prison in China's northwestern Xinjiang region for allegedly violating his terms of probation.
Ai has said in some media interviews that the decision to revoke Fake Cultural Development's business license could be a face-saving way for the authorities to back down over the tax evasion case, which has drawn widespread criticism from Ai's supporters worldwide.
The company has already posted a bond of 8.45 million yuan (U.S. $1.3 million) out of the total 15 million (U.S. $2.4 million) yuan fine, which will be automatically collected and put toward the fine.
It is now unclear whether he will have to pay the remaining 6.55 million yuan (U.S. $1.1 million), because the company that owes it no longer exists.
The bond was posted with the help of tens of thousands of supporters who sent in nearly nine million yuan worth of small donations—sometimes in the form of bills folded into paper airplanes and thrown over the gate of his Beijing home—after Ai's 81-day detention last year prompted an international outcry.
Ai was taken into custody at airport in April 2011 on his way to Hong Kong and held in a secret location, and the tax evasion charges were brought against him when he re-emerged in Beijing three months later.
The contemporary artist, architect, filmmaker, and blogger has spoken out against the Communist Party and accused the government of flouting the rule of law and the rights of citizens.
Reported by Gao Shan for RFA's Mandarin service, and by Wei Ling for the Cantonese service. Translated and written in English by Luisetta Mudie.