Today in Beijing, the founder of the country’s most successful electronics chain — the Best Buy of China, if you will — was convicted for bribery and insider trading, among other counts. And now he’s headed to jail.
Details of conviction
Huang Guangyu, whose net worth was once estimated at $6 billion, now faces 14 years in jail. And a fine of $90 million. One of the counts is bribing government officials. And what’s unusual about that is in China, the bribe-giver tends not to get busted, according to political scientist Dali Yang at the University of Chicago.
“It’s only fairly recently that the Chinese government has decided to include the bribe givers also as criminals,” says Yang. “It’s only usually the Chinese officials who are held accountable.”
As Yang sees it, regulators want to send a message we’re cracking down on corruption, cleaning up the image of China as a place to do business and invest.
Will U.S. businesses be more confident in investing in China?
Take the financial markets. Shanghai bills itself as a global financial center of tomorrow. But today, Chinese stock and bond markets have a reputation for creative shenanigans. And analysts say building credibility takes a long time, and optimists will say look, Huang Guangyu got a stiff penalty for insider trading as well; it’s getting better.
Who is the $6 billion man
Huang Guangyu built his empire out of nothing. He was born on a farm and a high school dropout. And then he began selling electronics goods. And now his chain, called Gome, has stores in every direction in every city — selling flat-screen TVs, washing machines, and most important in China, cell phones.