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Tycoon’s wife in China corruption net

Hong Kong, June 3 (Reuters): Hong Kong’s graft-busting agency has arrested the wife of one of China’s richest men for suspected corruption, a source close to the investigation said today.

Mao Yuping, wife of Chinese property tycoon Zhou Zhengyi and chairperson of Shanghai Merchants Holdings Ltd, was arrested along with 19 other people on Sunday and yesterday, the source said. The Shanghai government said it had launched a probe into Zhou’s flagship firm, Shanghai Nongkai Development (Group) Co.

Officials at Nongkai refused comment and would not disclose the businessman’s whereabouts, but a Shanghai police spokesperson yesterday denied reports that Zhou had been arrested there.

The couple’s Hong Kong home and offices had been searched and huge numbers of documents had been confiscated, the Hong Kong source said. “Charges won’t be made so soon as investigations are on,” the source said.

Meanwhile, Hong Kong media reports said Mao was released on bail later in the day, but officials from Hong Kong’s Independent Commission Against Corruption (ICAC) were not available for comment.

The ICAC said late yesterday it had arrested 20 people for suspected corruption and conspiracy to defraud.

The chairperson and a director of a Hong Kong-listed company and a former bank officer had been among those arrested, it said, without identifying them.

Shanghai officials gave few details of their investigation.

“We’ve found some problems with Nongkai’s operations and investigations are underway,” Shanghai’s government spokesperson Jiao Yang told reporters. She declined further comment.

Zhou, 42, was ranked last year by Forbes magazine as China’s 11th-richest person, with assets estimated at $320 million at the end of 2002, compared with $66 million a year earlier.

The businessman, who rose from a noodle-shop owner to head a business empire spanning real estate to finance, is the latest in a string of Chinese businessmen to come under the scrutiny of investigators.

Chinese state newspapers reported over the weekend that the probe concerned two billion yuan ($240 million) in loans Zhou had obtained from China’s central bank, the Bank of China.

Some Hong Kong newspapers said one of the people arrested had worked previously for the Bank of China, but that could not be confirmed independently.

Zhou, also chairman of Shanghai Land Holdings Ltd, runs his investments through Nongkai, which had sales of $540 million in 2002, mainly in property, domestic media reported.

In Hong Kong he is known by the Cantonese form of his name, Chau Ching Ngai, and his wife as Mo Yuk Ping.

Shares in both his Hong Kong-listed firms were suspended from trade pending clarification of allegations reported in newspapers, a spokesperson for both companies said.

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