Thu, November 27, 2008
Business > Industries > Police investigating China's richest man

Police: Tycoon probed for involvement in 'economic crimes'

2008-11-27 06:54:48 GMT2008-11-27 14:54:48 (Beijing Time)  Xinhua English

A logo of a GOME Electrical Appliances store is seen in Hong Kong (Photo Reuters)

China's appliance tycoon Huang Guangyu is seen in this undated file photo. [Xinhua]

Huang Guangyu, China's home appliance tycoon, is under investigation for involvement in "economic crimes," confirmed Beijing police on Thursday.

Company spokesman He Yangqing said Gome will respond to the news on Monday afternoon.

Earlier reports by the Beijing News said Huang Guangyu was under probe for involving in a stock market manipulation case.

Caijing, a respected Chinese financial magazine, reported that Huang was detained on November 19 as part of a probe into the manipulation of shares of SD Jintai, a little-known pharmaceuticals group controlled by Huang's brother, Huang Junqin. SD Jintai's shares soared more than 700 percent in 2007.

A source with the China Security Regulatory Commission (CSRC) told the Beijing News on Tuesday that CSRC will file a case for an investigation when the matter is "clear," but declined to give further comments.

The source with CSRC also indicated that the reason for Huang's investigation is far more "complicated" than mere "stock price manipulation."

Huang, 39, whose personal wealth is estimated at 43 billion yuan, is the richest man on the mainland, according to the 2008 Hurun Rich list.

Huang built up the appliance chain over the past two decades into one of the biggest retailers. Gome now has 1,300 outlets in more than 300 Chinese cities with 300,000 employees. Huang is also a real estate investor.

Shares in his company, the Hong Kong-listed Gome Electrical Appliances Holdings Ltd., were suspended on Monday ahead of the scheduled release of third-quarter results.

In its third-quarter results, released on Monday, the company said net profits rose 111 percent year-on-year in the first nine months to 1.59 billion yuan (US$227 million).

Gross profit increased 28 percent to 3.57 billion yuan while operating revenue hit 36.4 billion yuan, up 20 percent, the company said.

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