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China’s richest man under investigation

Chinese police said the country’s richest man and chairman of China’s top electronics retailer, GOME, was under investigation after local media reported he had been detained as part of a probe into share price manipulation.

“Relevant departments” were investigating Huang Guangyu (黃光裕), the chairman of GOME Electrical Appliances Holdings Ltd, an anonymous spokeswoman for the Xicheng district branch of the Beijing Municipal Public Security Bureau told reporters yesterday.

“At this time it’s not convenient for me to tell you the details, but he is under investigation,” she said.

The Chinese financial magazine Caijing said on the weekend that 39-year-old Huang was detained last Wednesday in relation to an investigation into stock movements of SD Jintai, a drugs and medical equipment firm controlled by Huang’s brother, Huang Junqin (黃俊欽).

SD Jintai’s stock surged more than eight-fold last year.

Chinese media reports yesterday said Huang Guangyu was also being investigated for other suspected offenses, including illegal loans, misuse of company funds and bribery.

Huang, worth US$6.3 billion, moved to Beijing in his late teens with his brother and set up a home appliances distribution firm with 30,000 yuan (US$4,392).

Two years ago, Chinese authorities probed Huang in connection with a loan deal involving his investment company, Eagle Property Group. Huang was later cleared of any wrongdoing.

Meanwhile, the former boss of one of the country’s biggest textile factories was arrested while attempting to flee the country, a local official said yesterday, as the bankrupt company’s Singapore-listed unit was put under court protection, Tao Shoulong (陶壽龍), former head of Zhejiang Jianglong Textile Printing & Dyeing Co, and his wife were arrested in Guangdong Province, Qi Xiaoning, a spokesman for the government in the eastern Chinese city of Shaoxing, confirmed.

Shaoxing-based Zhejiang Jianglong, which derived about three-quarters of its revenues from overseas sales, shut down suddenly last month, saying it was unable to honor 2 billion yuan in debts. About the same time, Tao and his wife, Yan Qi (嚴琪), disappeared after allegedly burning the company’s accounting records, reports by the official Xinhua News Agency and other state-run media said.

“Frankly, I feel a bit sympathetic toward Tao. He borrowed such a huge amount of money just to try to get the company through hard times, but in fact he couldn’t repay it,” Yan said.
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