Chinese tycoon Huang Guangyu charged with insider trading

A self-made entrepreneur once hailed as the wealthiest man in China has been charged with insider trading, in the latest twist in a rags-to-riches career.

More than 15 months after he was first arrested, Huang Guangyu now seems certain to swap his large home in a gated compound in Beijing for a prison cell.



The case underscores the risks faced by private entrepreneurs in a system controlled by envious and greedy Communist Party officials. Hundreds of government apparatchiks are believed to have been rounded up during the investigation into Mr Huang’s business practices.

The 40-year-old son of poor peasants faces additional charges of offering bribes and running illegal business operations. Mr Huang and several unidentified accomplices were handed over to a Beijing court at the weekend, hours before China went on holiday for the lunar new year. His move to trial followed a rush of sentences as the authorities hurried to clear up unfinished business before the start of the Year of the Tiger.

The former chairman of Gome Electrical Appliances Holdings, which is listed in Hong Kong and is currently China’s second-biggest electronics conglomerate, by market value, was detained initially in November 2008 for insider trading. On Christmas Eve last year prosecutors said that they had expanded their investigation, warning that Mr Huang could face charges for “new crimes”.

The son of a devout Christian family from the southern port of Shantou, Mr Huang topped China’s Hurun Rich List in 2004 and 2005. He regained that slot in 2008 with wealth estimated at $6.3 billion (£4 billion) from his shares in Gome and his growing property empire.

The tycoon vanished for several days before any announcement was made, triggering confusion in Gome and among shareholders that forced Hong Kong to halt trading briefly.

Mr Huang, who started with a single street stall selling radios and watches, is almost certain to be convicted, but he may escape the death penalty, which can be applied in particularly serious corruption cases. Chinese media have reported that the investigation has also implicated as many as a thousand officials, from grassroots level to the highest echelons of power. Among the many Communist Party officials arrested is the mayor of the boomtown of Shenzhen, on the border with Hong Kong, and a deputy minister of public security.

Mr Huang’s wife and elder brother have also been detained in connection with the case. It was not clear whether they had been charged.