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May 18, 2010
Tycoon jailed for graft

REVERED AS A MODEL ENTREPRENEUR

* Before his arrest, Huang was revered in the media as a model entrepreneur who rose from nothing by successfully capitalising on China's decades of economic reforms.

* After dropping out of school, he started building his fortune in his teens, running a roadside stall in Beijing where he sold radios and gadgets purchased from factories near his hometown in south China's Guangdong province.

* GOME Group is now China's largest electronics and appliance chain with more than 1,200 stores in more than 200 cities.
* He previously topped the Hurun Report's rankings of China's richest in 2004 and 2005.

* Trading in Hong Kong-listed GOME was suspended in November 2008 after Huang was placed under investigation. But it resumed in June last year after private equity firm Bain Capital invested at least US$417 million in the form of convertible bonds and shareholdings in GOME in a bid to rescue its business and tarnished reputation.

* A string of top business and government leaders have reportedly been implicated in Huang's case, including the sacked former mayor of the southern city of Shenzhen, Xu Zongheng. Two top police officials, including a former deputy minister of public security, were also detained on suspicion of bribery in connection with the case, reports have said.

* One of GOME's wholly owned subsidiaries, GOME Appliance, was charged earlier this year with bribery in connection with the charges against Huang.
GOME said it was 'highly concerned' about the case and pledged to 'actively defend against the accusation at the subsidiary'. But it said the damage to its operations would be limited, with the worst-case scenario being a fine.



Huang Guangyu stood accused of bribing five government officials with 4.56 million yuan in cash and properties from 2006 to 2008. -- PHOTO: REUTERS

BEIJING - A CHINESE court on Tuesday jailed the founder of home appliance giant GOME - once the country's richest man - for 14 years for bribery, insider trading and illegal business dealings, state media said. Huang Guangyu - a high school dropout who built what is now the country's largest electronics and appliance chain - was also ordered to pay a fine of 600 million yuan (S$122.3 million), Xinhua news agency reported. Authorities seized another 200 million yuan in assets from Huang, once known as the 'Price Butcher' for GOME's low prices. Huang, in his 40s, was named China's richest man in October 2008 with an estimated net worth of US$6.3 billion by the Hurun Report magazine.

He was detained and placed under investigation a month later, and resigned as GOME director and chairman in January 2009. He was held for more than a year without charge, and tried in April in a Beijing court. He stood accused of bribing five government officials with 4.56 million yuan in cash and properties from 2006 to 2008, Xinhua reported previously. The bribes were offered in exchange for 'improper benefits' for Huang's GOME Electrical Appliances Holdings and Beijing Pengrun Real Estate Development Company, a private equity group which Huang headed, the reports said. China's Securities Regulatory Commission previously said he was suspected of manipulating trading in two mainland-listed companies. -- AFP

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May 28, 2010
Tycoon: 14 yrs jail too harsh



Huang Guangyu, the founder of retail chain Gome, was found guilty of bribery, insider trading and illegal business dealings this month, after being detained for over a year. -- ST PHOTO: EDWIN KOO

BEIJING - CHINA'S one-time richest man and the founder of a major retail chain has appealed his 14-year jail sentence for bribery and insider trading, the Legal Daily reported on Friday. Huang Guangyu, the founder of retail chain Gome, was found guilty of bribery, insider trading and illegal business dealings this month, after being detained for over a year. The Legal Daily said Huang believed the sentence and fines were too heavy, and further disputed the finding that one of his companies, Pengrun, had paid bribes.

Huang was fined 600 million yuan (S$123 million) and had 200 million yuan worth of property confiscated, while his two firms, Gome 0493.HK and Pengrun, were fined 5 million yuan and 1.2 million yuan respectively for paying bribes. At the end of 2009, Huang still held roughly one-third of Gome's total outstanding shares, worth $1.9 billion, according to Thomson One Analytics. Huang disappeared without a sign when he was first detained, raising questions about both corporate disclosure and police procedure in China. His case netted a number of senior police and other officials. -- REUTERS