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Police: Probe of China appliance tycoon true
(CRI)
Updated: 2008-11-26 14:33

 Beijing police has for the first time in days verified earlier media reports on the investigation of home appliance tycoon Huang Guangyu, who was reportedly involved in a stock market manipulation case, the Beijing News reported on Wednesday.


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

The Beijing Municipal Bureau of Public Security told the Beijing News that Huang was questioned, but refused to publish the reason behind the legal investigation and whether Huang is still under suspicion.

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."

Earlier, Beijing police declined to comment on Huang's reported detention and Gome, Huang's company, said the management was "trying to verify" relevant reports.

Shares of Huang's company, Gome Electrical Appliances, were suspended Monday in Hong Kong, ahead of the scheduled release of third-quarter earnings.

Huang, 39, built up the company over the past two decades into one of the biggest retailers in China, and was named last month as the wealthiest person in China with a net wealth of US$6.3 billion, according to the Hurun Report, which compiles lists of China's wealthy tycoons.

The appliance chain has 1,300 outlets in more than 300 Chinese cities and employs 300,000 workers. Huang also has heavily invested in real estate.

In third-quarter results released Monday, the company said its net profits rose 111 percent in the first nine months over the same period last year, to about 1.596 billion yuan.