Net tightens around China's richest man

http://www.timesonline.co.uk/tol/news/world/asia/article5464372.ece

January 7, 2009
Net tightens around China's richest man as wife is detained
Huang Guangyu, China's richest man
Jane Macartney, Beijing

The net is tightening around China’s richest man with the detention of his wife amid a police investigation into possible financial offences by the businessman who founded the country’s biggest appliance chain.

State media said Du Juan, 37, was now under police guard in Beijing and had been formally placed under “residential surveillance”. Ms Du had returned to Beijing from an unidentified location outside the city before Christmas. The police wanted to prevent her from leaving the country.

She has long been a close business associate of her husband, running large parts of the company that Huang Guangyu built up from a streetside stall selling watches to a nationwide conglomerate over hundreds of stores.
Mr Huang, 39, listed as China’s weathiest man on the Hurun Rich List this year with wealth estimated at £4 billion, disappeared in late November and was later revealed to be under investigation for alleged insider trading.

His company, Gome Electrical Appliances Holdings, suspended him from executive duties on December 23 along with his wife, who had been in charge of the firm’s operations in Hong Kong where Gome is listed on the stock market.

The couple met in the mid-1990s when Mr Huang was building up his business and Ms Du was working in the loans department of the Beijing branch of the Bank of China.

They married in 1996 and state media have reported that the low-key couple have three children. The media have described Ms Du as slender and small, a fast-talking businesswoman with a firm command of the intricacies of finance who has been personally responsible for operations in Hong Kong. The couple recently bought an 8 million dollar home in the former British colony under her name.

Ms Du had served as executive director of Gome from August 2002 and was closely involved in a deal in March 2007 to set up a $500million private equity fund with Bear Stearns to focus on China’s retail sector.

Known as “the Price Butcher” for the discounts available at his stores, Mr Huang has always been vulnerable in a system in which connections count for more than business clout. Many of China’s self-made tycoons avoid the limelight, aware that their prominence could trigger retribution from officials who are jealous of their meteoric rise to prosperity.

It is not the first time that Mr Huang has faced questioning. He was investigated in late 2006, along with his brother, for alleged financial irregularities involving the use of a loan to speculate in real estate. Both brothers were released and cleared of any charges in January 2007.