Business Intelligence on Retailing, Franchising, and Consumerism in China

Gome's President Goes To Ground While Under Investiation By Beijing Police

According to reports in the international press Huang Guangyu, dubbed "the richest man in China", has disappeared and is being sought by the Beijing police.

Earlier reports in local media said that Huang Guangyu, president of the Gome Electric Appliance Group, is currently under investigation by Beijing police for market manipulation.

Prior to this, reports from Singapore said that Huang, the richest person on Chinese mainland according to the Hurun Report 2008, was taken away by Beijing police on November 20 and on the evening of November 23, foreign media formally reported that Huang was questioned for manipulation of the share price of Shandong Jintai Group — a company controlled by his brother Huang Junqin.

Huang Junqin, the founder of Towercrest Group, was originally committed to the appliances sales in Beijing together with Huang Guangyu. Later, he shifted to the real estate industry and acquired a stake in Jintai in September 2001. His two companies Beijing Towercrest Investment Management Group and Beijing Towercrest Real Estate Group hold 10% and 1.92% stakes in Jintai, respectively.

Reports from Hong Kong, Taiwan, and Singapore say that the news originated from anonymous mobile phone messages sent to reports in Beijing, saying that Huang and the financial director of Gome, Zhou Yafei, had been taken away by the authorities and are under investigation. Huang's wife Du Juan and another key finance officer of the company have fled, because of their involvement in major criminal cases.

A spokesperson for Gome stated that the company would not comment on this issue. The spokesperson emphasized that Gome is an independent listed company with a mature management system and it will not be affected by rumor.

At the same time, commenting on the news that Samsung has stopped supplying to Gome, the company says it is totally rumor and Gome's suppliers, including Samsung, Changhong, Haier, Siemens and TCL, have sent announcements to the company, which say they will firmly support Gome and will continue to supply products to Gome.

Meanwhile the Hong Kong stock exchange halted trade of Gome shares on November 24.

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