Guilty of something

Huang Guangyu in happier days

A GUILTY verdict was never in doubt. When Huang Guangyu, the founder and controlling shareholder of Gome, a vast retail-electronics chain, vanished from public view in 2008 it was all but certain that he had been arrested. In due course he would surely be sentenced for various crimes. The only mystery was which ones.

The question was partially answered, after a closed trial, on May 18th. It was announced that Mr Huang had pleaded guilty to vague charges of illegal business dealings, insider trading and bribery. He was forced to pay 800m yuan ($119m) and handed a 14-year jail term, both records for white-collar crime in China. Intriguing details were revealed but these raised more questions than they settled.

Among his dealings Mr Huang acknowledged illegally converting about HK$800m ($103m), with some of the money going through a casino in Macau and an illegal bank. Officially, China's capital account is closed, but its businesses are inevitably involved in currency conversion to carry out cross-border trade and investment. Macau has long been suspected as a backdoor channel for converting money. It is not entirely clear why Mr Huang decided to circumvent the rules, or why something believed to be commonplace elicited such a strong official response.

The size of Mr Huang's empire undoubtedly attracted official scrutiny—and displeasure. From street sales in Beijing and no evident resources, he built a sprawling business. In 2008 Mr Huang was reckoned to be the country's richest businessman, worth $6.3 billion, by the Hurun Report, a widely followed newsletter. At the core of his rise were the ubiquitous Gome stores, which sold cameras, washing machines, televisions and the like to a huge population just discovering the joys of consumption. But this side of the business was intertwined with property, imports and mountains of cash. Mr Huang was a man eager to pursue numerous opportunities.

Among his other roles he was a director and senior manager of Beijing Centergate Technologies. He confessed to earning 309m yuan through insider knowledge of a restructuring. On related charges Mr Huang's wife was sentenced to over three years in prison and Centergate's chairman to three years, and both were fined.

However murky the details of the first two convictions, it is a third which raises the largest questions, though it involves far less cash. Mr Huang admitted to paying bribes totalling 4.56m yuan to five government officials between 2006 and 2008. What he got in return has not been made public, but this may explain why the trial was held behind closed doors. Whether or not it is related to the case, there has been a profound political shake-up in southern China, including the abrupt replacement of Shenzhen's mayor and a senior police official in Guangdong province. Mr Huang's crimes will not be made completely public but the sentence in his case leaves no doubt about their importance.