Home-appliance tycoon Huang Guangyu is under investigation for market manipulation, Caijing magazine's website reported Sunday.
The report quoted unnamed sources close to Huang as saying that he was taken away by investigators late Wednesday. Huang's company Gome was not immediately available for comment, but the report quoted sources as saying that the Hong Kong-listed company was likely to issue a statement soon.
The report said Huang was allegedly involved with stock price manipulation in a company controlled by his elder brother Huang Junqin.
The elder Huang announced on July 9 last year that two of his other companies would inject assets worth 22 billion yuan ($3.2 billion) into mainland-listed Shanghai Jintai Co Ltd, which sent the latter's share price soaring by almost 450 percent to 14.09 yuan in 30 trading days in July and August. But the share price started to slide after it hit a peak of 26.58 yuan on Aug 31, 2007; and closed at 2.21 yuan on Friday.
However, the Caijing website did not specify what role Huang Guangyu played in the dramatic changes of the stock prices.
The brothers were investigated in 2006 for securing loans illegally, but cleared of the allegation in January, 2007.
Gome's price in Hong Kong fell by almost 14 percent last week to close at HK$1.12 on Friday.
Forbes magazine last month ranked Huang the second richest man on the Chinese mainland with assets of 18.36 billion yuan.