Huang Guangyu, the chairman of Gome Electrical Appliances, who has a personal fortune of £4 billion, investigated over possible economic crimes.

Police in China have confirmed that they are holding the country's richest man - the head of its largest electrical goods retailer - for investigation over possible economic crimes. No other details have emerged about the questioning of Huang Guangyu, the chairman of Gome Electrical Appliances, who has a personal fortune of £4 billion. Gome said that it understood that the 39-year-old tycoon was being investigated for his personal activities and that the company was not linked to any suspicious transactions. Gome has made its chief executive acting chairman in the absence of Mr Huang, who was detained ten days ago. The Chinese business magazine Caijing said that Mr Huang was suspected of insider trading in connection with wild fluctuations in the price of a company controlled by his brother and listed on the Shanghai stock market. However, China's securities regulator said that the reasons for the investigation were far more complicated than stock price manipulation. One newspaper said that Mr Huang was suspected of money-laundering, tax evasion and obtaining illegal loans. The Southern Weekend newspaper ran a two-page article speculating on the reasons behind Mr Huang's apparent fall from grace. It cited his dwindling interest in his core electronics business since its listing in Hong Kong in 2004 resulted in a multiplication of his personal wealth and inspired his interest in the capital markets. Mr Huang, the son of peasants from the southern port of Shantou, left home to make his fortune in northern China and transformed a street stall selling watches and radios into a nationwide empire of 1,300 stores.
One question is how Mr Huang made the leap into the big time. Many of China's successful entrepreneurs are so reticent on this point that this moment in the career of a tycoon is now popularly known as “original sin”. In a system in which connections are crucial but credit is rarely available to small businessmen, few of China's new rich are thought to have risen without some shady dealing in their past. Whether the “original sin” ever comes to light often depends on their keeping on the right side of the Government. Since 2004, Mr Huang has spent increasing amounts of time dabbling in capital markets and shifting assets between companies, Southern Weekend said. Quoting sources close to investigations, it said that Mr Huang's disappearance may be related to a corruption inquiry into a Commerce Bureau official. So little information has been available about the disappearance of the man named as China's wealthiest on the Hurun Rich List that even the state Xinhua news agency commented that the media should be kept informed. A state-owned Chinese company, shocked at the risks of international investments, has asked the Government to help it to seek compensation from Belgium over its losses in the state-led carve-up of Fortis, the financial group. A Beijing source said that Ping An Insurance believed that the role of Belgium's Government in dismantling Fortis was tantamount to confiscation.