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China tycoon goes on trial for graft

Last Updated: Thursday, April 22, 2010 - 15:21

Beijing: The former head of a top appliance chain who was once China`s richest person went on trial on Thursday nearly two years after being detained on charges of insider trading and bribery.

The trial of Huang Guangyu, founder of the Hong Kong-listed GOME chain of home appliance and consumer electronics stores, opened in Beijing, a court official said.

Huang, believed to be in his early 40s, disappeared into police custody in late 2008 and was charged in January 2009 with "illegal business practices", including insider trading and bribery, state press reports said earlier.

Xinhua news agency said Huang is being charged with offering bribes of up to CNY 4.56 million (USD 667,600) to a number of officials.

His court appearance is one of the highest-profile Chinese trials of a private entrepreneur yet, and one that will be watched closely in the business community.

Huang, known as `The Price Butcher` for his chain`s low prices, was named China`s richest man with an estimated net worth of USD 6.3 billion by the annual Hurun Report rich list in 2008.

According to state press reports, a string of top business and government leaders have been implicated in Huang`s case, including the sacked former mayor of the city of Shenzhen, Xu Zongheng.

Two top police officials, including a former deputy minister of public security, were also detained on suspicion of bribery in connection with the case, reports have said.

Huang resigned as GOME director and chairman in January 2009. He remains the company`s largest shareholder, Xinhua said.

He is suspected of manipulating trading in two mainland-listed companies, China`s Securities Regulatory Commission said previously.

Born into a farming family in southern China`s Guangdong province, Huang began building up his huge fortune at the age of 17 by selling cheap electronic devices in what was hailed as a rags-to-riches story.

GOME Group is now one of China`s largest electronics and appliance chains with more than 1,200 stores in over 200 cities.

Huang also ventured into private equity as head of the Beijing-based Pengrun Investment company.

He previously topped the Hurun Report`s rankings of China`s richest in 2004 and 2005.

Trading in Hong Kong-listed GOME was suspended in November 2008 after Huang was placed under investigation.

But it resumed in June last year after new chairman Chen Xiao announced that private equity firm Bain Capital would invest USD 233 million through a bond issue.

Bureau Report

First Published: Thursday, April 22, 2010 - 15:21

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