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China's Jailbird Billionaire

BEIJING (TheStreet) -- China has gotten a lot more comfortable with high-rolling billionaires since paramount leader Deng Xiaoping opened the door to fortune-building in the 1980s by declaring that his communist country would "let some people get rich first."

That famous line echoes every year when China's state media and the blogosphere give prominent play to annual lists of the world's richest people.

It's been top news lately that, according to the 2014 lists released this week by Forbes magazine and last week by the Shanghai-based Hurun Report, mainland China has more billionaires than any country except the United States.

Billionaires in China are generally admired for their success. Leading the pack is Wang Jianlin, a real estate-entertainment mogul with at least US$ 15 billion. His Wanda Group bought AMC Entertainment (AMC) in 2012 and guided it through an IPO in 2013. Also listed are Baidu (BIDU) search engine magnate Li Yanhong (who goes by Robin Li), Tencent Holdings' (TCEHY:OTC) boss Ma Huateng (Pony Ma) and e-commerce giant Alibaba executive Ma Yun (Jack Ma).

But in a curious twist, China's media outlets seldom neglect to mention that one of the country's best-known billionaires, Huang Guangyu, is running his Gome (GMELY:OTC) appliance and electronics retail chain from prison. He's been there since 2010.

The company, which has about 1,600 stores, has traded on the Hong Kong Stock Exchange since 2004. It also trades over the counter on Nasdaq. The U.S. private equity firm Bain Capital controls about 10% of Gome's Hong Kong shares.

This is the 10th year that Huang's name -- which is sometimes spelled Wong Kwong Yu or Wong Kwong-yu -- has appeared on a China rich list. He was labeled the country's wealthiest citizen annually for five years in row, from 2004 through 2008. He's now fallen to 39th place, according to Hurun, with net assets of $3.2 billion. Forbes says he's No. 87 in China and worth only $1.5 billion.

Authorities detained Huang in 2008 on charges of fraud, insider trading and tax evasion. Few details of his alleged wrongdoing were released to the public before he was convicted two years later and sentenced to 14 years behind bars.

The saga of Huang's rise from 17-year-old storekeeper to billionaire by age 35 has been repeated in media reports for more than a decade. He started with borrowed money and his family's help.

Huang's business-savvy wife Du Juan, a Gome executive, is often described as his ever-loyal cohort. She was convicted in 2010 as a Huang accomplice and sentenced to 42 months in prison, but given a total reprieve and freed by the court.

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