Huang Guangyu, is one of China’s richest people, with wealth estimated at about $6.3 billion.
AFP 28 November 2008
SHANGHAI, CHINA- Electrical appliance tycoon Wong Kwong-yu, one of China’s wealthiest men, is under investigation for alleged involvement in economic crimes, police confirmed on Thursday, ending several days of speculation regarding his whereabouts.
‘We can confirm for you the news that Wong is being held for investigation by Beijing police in connection with economic crimes,’ a spokesman for Bejing’s police bureau said. The spokesman, who like many Chinese officials would only give his surname, Zhao, said he could provide no more details.
It was the first official confirmation by authorities of widespread reports that Wong, founder and chairman of Gome Electrical Appliances Holdings, China’s biggest appliance chain, is being questioned for alleged share trading violations or other crimes.
At 39, Wong, who is also known as Huang Guangyu, is one of China’s richest people, with wealth estimated at about $6.3 billion.
He and his wife Du Juan, who is a company executive director, hold a 39.48 per cent stake in Gome’s listed unit, according to the information from the Hong Kong Stock Exchange.
According to the financial magazine Caijing and other state-run publications, Wong was detained by police last week during a probe into allegations of share price manipulation involving a company controlled by his brother.
Gome issued a statement on Friday saying that Wong had handed responsibility for company affairs to CEO Chen Xiao, after it was informed by phone of Wong’s detention by police.
It suspended its shares from trading in Hong Kong as of Monday.
The company said its chief financial officer, Zhou Yafei, was also under investigation. It set up a committee to handle issues related to the investigation and was planning a special audit of company accounts. So far, there was no evidence of misappropriation of funds, Gome said in the notice to the Hong Kong Stock Exchange.
Local media have reported extensively on Wong, whose career has been one of the country’s most spectacular entrepreneurial success stories.
Wong was born to a poor family in the southern province of Guangdong. He moved to Beijing as a teenager and started out selling clothing, but later switched to appliances. Gome now operates more than hundreds of stores and employs about 300,000 people.
It’s not the first time the tycoon has faced legal scrutiny. An investigation into an allegedly illegal loan to Wong was dropped last year, and Gome announced in June that it was facing a tax probe, but the results of that investigation were not announced.
Surfacing at a time when many in China and elsewhere are primed for indignation over financial shenanigans, the story is getting front-page coverage. In a place like China, where the media is state controlled, such intense attention may not portend well for Wong.
So far, there is no sign that the company itself is facing any financial crisis.
Gome, whose name in Chinese means ‘country beautiful’, recently agreed to a deal with Dell Inc to sell Dell computers through its outlets.
The company released third-quarter earnings on Monday showing the company had more than doubled its net profit from a year earlier in the first nine months of the year.
Gome’s shares closed on Friday at 1.12 Hong Kong dollars, down nearly 80 per cent from their 12-month high of HK$5.37.
Apart from Gome, his flagship company, Wong has extensive real estate holdings and has dabbled in private equity. Last year investment house Bear Sterns announced a $500 million (S$755.2 million) investment fund venture with Wong, but it was unclear if that project ever took off.
The financial status of Wong’s mostly privately held real estate ventures is unclear, but the recent economic downturn has left many in the industry short of cash, said Mr. Xiang Chunchong, a leasing manager at Shanghai Tomson Real Estate Corp.
‘This is no small matter. Gome’s suppliers will likely be pushing for their payments, which could put the company in a bind,’ Mr. Xiang said.
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China Gome Tycoon Under Probe
Huang Guangyu, is one of China’s richest people, with wealth estimated at about $6.3 billion.
AFP
28 November 2008
SHANGHAI, CHINA- Electrical appliance tycoon Wong Kwong-yu, one of China’s wealthiest men, is under investigation for alleged involvement in economic crimes, police confirmed on Thursday, ending several days of speculation regarding his whereabouts.
‘We can confirm for you the news that Wong is being held for investigation by Beijing police in connection with economic crimes,’ a spokesman for Bejing’s police bureau said. The spokesman, who like many Chinese officials would only give his surname, Zhao, said he could provide no more details.
It was the first official confirmation by authorities of widespread reports that Wong, founder and chairman of Gome Electrical Appliances Holdings, China’s biggest appliance chain, is being questioned for alleged share trading violations or other crimes.
At 39, Wong, who is also known as Huang Guangyu, is one of China’s richest people, with wealth estimated at about $6.3 billion.
He and his wife Du Juan, who is a company executive director, hold a 39.48 per cent stake in Gome’s listed unit, according to the information from the Hong Kong Stock Exchange.
According to the financial magazine Caijing and other state-run publications, Wong was detained by police last week during a probe into allegations of share price manipulation involving a company controlled by his brother.
Gome issued a statement on Friday saying that Wong had handed responsibility for company affairs to CEO Chen Xiao, after it was informed by phone of Wong’s detention by police.
It suspended its shares from trading in Hong Kong as of Monday.
The company said its chief financial officer, Zhou Yafei, was also under investigation. It set up a committee to handle issues related to the investigation and was planning a special audit of company accounts. So far, there was no evidence of misappropriation of funds, Gome said in the notice to the Hong Kong Stock Exchange.
Local media have reported extensively on Wong, whose career has been one of the country’s most spectacular entrepreneurial success stories.
Wong was born to a poor family in the southern province of Guangdong. He moved to Beijing as a teenager and started out selling clothing, but later switched to appliances. Gome now operates more than hundreds of stores and employs about 300,000 people.
It’s not the first time the tycoon has faced legal scrutiny. An investigation into an allegedly illegal loan to Wong was dropped last year, and Gome announced in June that it was facing a tax probe, but the results of that investigation were not announced.
Surfacing at a time when many in China and elsewhere are primed for indignation over financial shenanigans, the story is getting front-page coverage. In a place like China, where the media is state controlled, such intense attention may not portend well for Wong.
So far, there is no sign that the company itself is facing any financial crisis.
Gome, whose name in Chinese means ‘country beautiful’, recently agreed to a deal with Dell Inc to sell Dell computers through its outlets.
The company released third-quarter earnings on Monday showing the company had more than doubled its net profit from a year earlier in the first nine months of the year.
Gome’s shares closed on Friday at 1.12 Hong Kong dollars, down nearly 80 per cent from their 12-month high of HK$5.37.
Apart from Gome, his flagship company, Wong has extensive real estate holdings and has dabbled in private equity. Last year investment house Bear Sterns announced a $500 million (S$755.2 million) investment fund venture with Wong, but it was unclear if that project ever took off.
The financial status of Wong’s mostly privately held real estate ventures is unclear, but the recent economic downturn has left many in the industry short of cash, said Mr. Xiang Chunchong, a leasing manager at Shanghai Tomson Real Estate Corp.
‘This is no small matter. Gome’s suppliers will likely be pushing for their payments, which could put the company in a bind,’ Mr. Xiang said.
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