Page last updated at 03:00 GMT, Tuesday, 18 May 2010 04:00 UK

Profile: Huang Guangyu

By Michael Bristow
BBC News, Beijing

Huang Guangyu speaks in Beijing, China (November 2006)
Mr Huang said in the early days he was "just out to make money"

Huang Guangyu's rise to become, at one time, China's wealthiest individual is the classic tale of rags to riches.

The story varies slightly depending on who is telling it, but he apparently began his commercial life selling odds and ends, mostly with his brother.

Before long they were rich beyond most people's wildest dreams - only for Mr Huang to be brought back down to earth after being arrested.

The company he founded, Gome Electrical Appliances, is still going but, if convicted, its founder could be spending up to 15 years in prison.

Huang Guangyu was born into a poor farming family in Shantou in southern China's Guangdong province, the birthplace of many of China's entrepreneurs.

According to the Hurun Report, which tracks the wealth of people in China, he used to supplement his mother's income by selling used books and discarded plastic bottles after school.

By the age of 17 he had moved to Beijing with his brother, selling cheap electrical appliances with the help of a bank loan of just $3,600 (£2,300), said Forbes magazine, which also measures individuals' wealth.

The brothers' retail business took off in the late 1980s and they expanded into the property market: before long, they were both worth millions of dollars.

Proud businessman

Mr Huang's Gome stores - selling appliances such DVD players, TVs and air conditioners - soon had hundreds of branches across China.

The company's success seems to have been based on selling goods as cheaply as possible to attract as many people as they could to the stores.

A GOME store in Shanghai, China (24/11/2008)
Gome has been hard-hit by the economic downturn

"In the early days, we were just out to make money," Mr Huang told the Hurun Report in an interview in 2004.

By 2008, his wealth was estimated at between $2.7bn and $6bn. Pictures of him at the time show a proud businessman.

But later that year things started to go wrong. Mr Huang was detained in that November on suspicion of manipulating share trading in two listed companies.

He was then removed as Gome's chairman.

Mr Huang was later charged and has now been found guilty of illegal business operations, insider trading and bribery.

Gome has also hit hard times since Mr Huang was arrested, partly due to the downturn in the global economy from late 2008.

What the current chairman called "an unfavourable event involving the founder of the company" cannot have helped confidence in the firm.

Last year profits fell and a private investment firm, Bain Capital, pumped money into Gome, which is listed on the Hong Kong Stock Exchange.

But the firm's prospects look brighter than Mr Huang's. He is now facing 14 years behind bars.

The arrest of Mr Huang has led to suspicions about the actions of China's elite wealthy business leaders.

"His case revealed loopholes China ignored while concentrating on its economic growth," wrote China's state-run Xinhua news agency shortly after Mr Huang's arrest.

"His detention inspired people to call for a healthier market environment for business owners to compete in."

Print Sponsor

China charges tycoon over fraud
15 Feb 10 |  Asia-Pacific
China tycoon's arrest confirmed
27 Nov 08 |  Asia-Pacific
China tycoon's company in trouble
24 Nov 08 |  Asia-Pacific
Retail boss tops China rich list
02 Nov 06 |  Business

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific