May 18th, 2010
01:03 PM ET

Chinese tycoon sentenced to 14 years in prison

Huang Guangyu, who was once named China's richest man, is now going to prison.

Huang Guangyu, once China's richest man, was sentenced Tuesday to 14 years in prison, state media reported.

Huang - the head of Gome, one of China's leading retail chains - was charged with stock-market manipulation, insider trading and bribery.

The sentence, handed down Tuesday, also fines Huang 600 million yuan ($87.8 million) and confiscates property worth 200 million yuan ($29.2 million), said the Xinhua news agency.

The 41-year-old Huang went on trial in late April.

He emerged as a rags-to-riches entrepreneur in the late 1980s, when young Chinese pursued business ideas and turned them into multi-million dollar ventures.

Born to a poor family in southern Guangdong province, he moved to Beijing in his late teens and, with a capital of 30,000 yuan ($4,391), set up with his brother a home appliances distribution company. He founded Gome Electrical Appliances Holding in 1987 and built it into a flourishing retail chain.

Huang ranked first on Hurun's China Rich List, a local publication, in 2008 with an estimated fortune worth $6.3 billion. Such a top ranking is usually not celebrated in China because of the scrutiny it brings. Huang typically kept a low profile despite his wealth and influence.

His meteoric rise has captured the popular imagination in and outside China. He also inspired many aspiring Chinese entrepreneurs.

Police detained Huang in November 2008 for an investigation into suspected "economic crimes." Little was heard of him or of the investigation but the police dragnet gradually grew wider, ensnaring government and police officials in charge of fighting financial crimes.

Huang resigned from Gome's company board in January 2009.

In February, after 15 months in custody, Huang was formally charged.

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Filed under: China • Justice
soundoff (94 Responses)
  1. Leo

    now these people know how to deal with corrupt crooks in that country, they need that policy here in the US, alot of people would be in the slammer.

    May 18, 2010 at 2:13 pm | Report abuse |
  2. Joe

    Can we get the Goldman people prosecuted in China?

    May 18, 2010 at 2:19 pm | Report abuse |
  3. Pawsglas

    with $6.3 billion what was this guy staying in China for. I'm sure some nation would be glad to harbor him. What a dope.....

    May 18, 2010 at 2:20 pm | Report abuse |
    • gjcvanc

      Having done business in China for over 25 years and seeing the meteoric rise of wealth in that country, Huang almost certainly had the overwhelming vast majority of his wealth tied up in Chinese businesses, property, factories, etc and would find it impossible to bring any significant amount of wealth out of the country because of absolutely rigid Chinese government regulations. He could likely leave the country but would only be able to bring a very tiny fraction of his wealth to whatever country accepted him. He would likely concede the vast majority of his wealth to the Chinese government if he left China permanently and would face extradition back to China if crimes were committed.

      May 19, 2010 at 1:12 am | Report abuse |
  4. chipsmydog

    If you want to know why America is spiraling downward, come read the comments after this article.

    Keep an eye out for the comment calling for military tanks to drive down Wall St. and crush any one wearing a suit and talking on an iPhone or Blackberry.

    Or," Mao was the most inspiring leader in modern times."

    May 18, 2010 at 3:19 pm | Report abuse |
  5. Aleksis N.

    It's basically part of the communist doctrine to incriminate those who amass too much wealth. Now that isn't very socialized, is it?

    May 18, 2010 at 3:24 pm | Report abuse |
  6. Marina

    We jailed Martha Stewart , they jailed Huang Guanyu.. , see JUSTICE!

    May 18, 2010 at 3:37 pm | Report abuse |
    • marc

      Big difference: Martha is still alive and well and living a rich life. Huang will probably be dead, and his family will be banished to the lowest class of the chinese society.

      May 19, 2010 at 7:24 am | Report abuse |
  7. sell

    chinese communist oligarchy just got $29 million dollars richer. They do the same thing in Russia. Get to powerful or don't pay your kickbacks they throw you into prison.

    May 18, 2010 at 5:07 pm | Report abuse |
  8. Nafiu

    Dis kind of leadership my country(Nigeria) deserves where it citizen 'll be brought to justice irrespective of his/her social status,
    Not a country where officials,politicians and bussiness men/ women do all such kind of looting and sheddy deals wit pride!

    May 18, 2010 at 5:13 pm | Report abuse |
  9. DON'TFORGET

    IF the guy is guilty, then I am all for the harsh sentence and even the forfeiture of his assets. But remember this is a gov't that inflicts its power and punishment in devastating and unjust fashion (how do you spell Tieneman Square?). If anyone demonstrates power or charisma that Beijing cannot control, it seems like they will get all tanked up and just roll over the threat. 14 years in a Chinese prison? I'd almost rather be run over by the tank...
    ...but of course China would NEVER lie about their government's side of the story, would they? sheesh.

    May 18, 2010 at 5:49 pm | Report abuse |
  10. think

    There is no such thing as a business person in China that does NOT pay bribes. Ask anyone from there, or any business person who has tried to do business there for confirmation if you don't believe it. The bribes allow them to do business relatively unmolested by government interference (following laws, regulations, avoiding police raids and seizure of property, etc...). It's simply the way Chinese society works.
    The only times these bribes don't protect against government action are when the country is embarrassed (as with the melamine milk issue), the officials demand more than the person can pay, an official feels insulted, or the official isn't paid what they demand.
    This man was not a national embarrassment from what the story states. He also certainly has enough money to pay any demands. Therefore, he was most likely arrested because he either insulted a party official or refused to pay their bribes.
    It is possible it was for some other reason, but if so there isn't enough information here to determine what that might be.

    May 18, 2010 at 6:57 pm | Report abuse |
    • gjcvanc

      Having done business in China for over 25 years, it is likely that Huang was guilty of the criminal charges brought forth by the Chinese justice system. Bribes are an integral part of the business environment in China and there is nothing wrong with it. It is just a cultural difference from the West and if you want to get ahead in China, then you will just have to accept it. Huang paid numerous bribes through his business career and it is very unlikely that he would not have paid any bribe to stay out of prison. He was jailed because of the most probable reason – he was guilty of the charges put forth by the Chinese justice system and not because he insulted a civil servant!

      May 19, 2010 at 1:33 am | Report abuse |
  11. Dumpie

    Everybody should know communist corrupt and will help you to build your business with a right hand untill it big enough also the left hand they absultely rob you and put you in prison. Our family was a victim of Vietnam communist party.

    May 18, 2010 at 7:29 pm | Report abuse |
    • Leland

      Stop comparing Vietnam to China, Vietnam is 20 years behind of China.

      May 19, 2010 at 12:58 pm | Report abuse |
  12. brown

    Don't worry your grandchildren's children will grow up under Chinese law!

    May 18, 2010 at 7:52 pm | Report abuse |
  13. rbala

    In China, I think they lack due process but at the same time here in the USA we have no process. Goldman and Morgan Stanley knowing sold everyone bad CDOs and then even shorted them and many billions...and tanked the global economy and many on Wall Street have brought many poor souls to the edge of penury by their actions. Even a life sentence is not good enough for them...So, sometimes tough justice like China is warranted and the US Govt instead of punishing crooks is aiding them with money from Main Street - how stupid can you be?

    May 18, 2010 at 8:27 pm | Report abuse |
    • CLOCK

      I think China woulda let GS get away with their crap over there too if they agreed to pay them a good sum of money. They really don't give a crap about anything cept for money and becoming world power. Well I guess that is not fair statement, they cling onto their culture like every other Asian country, so they care about culture, money, and power.

      May 19, 2010 at 7:44 pm | Report abuse |
  14. Philip

    To blame most Chinese officials are corrupted is not fair. I worked there for almost a year, and I found most of them were clean.

    May 18, 2010 at 9:32 pm | Report abuse |
  15. Allen

    Two articles mentioning China and still nothing on CNN about the Obama administration apologizing to the Chinese communists for the Arizona law no one in the administration has even read. Had they read it, I suppose they could have apologized for the federal law that states essentially the same thing. Meanwhile, the Chinese would roll the tanks back into Tianamen tomorrow if legal Chinese residents start complaining.

    May 18, 2010 at 10:36 pm | Report abuse |
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