BEIJING (AFP) - - Shares in China's largest home appliance chain were suspended Monday amid reports its billionaire owner, the nation's second-richest man, had been detained on suspicion of market manipulation.

Huang Guangyu, the 39-year-old founder of Gome Electrical Appliances Holdings, was taken in for questioning over wild fluctuations in the price of a company controlled by his brother, the state-run Caijing magazine said.

State-run Caijing magazine, which did not reveal its sources, said Huang was detained on Wednesday last week. Other Chinese media outlets carried the story, and it was also reported by state television's midday news programme.

After its shares in Hong Kong were suspended, Gome released two statements to the city's stock exchange in which it said authorities had not informed it of any legal proceedings, but did not address the allegations directly.

"The company is not in a position to confirm the accuracy of the information set out in the newspaper articles," Gome said in the second statement.

"The company has not received any notice or legal documents in connection with the allegations from any regulatory, governmental or judicial authority in the People's Republic of China," it said.

In the first statement announcing the trading suspension, Gome said the company's financial position and relationships with its suppliers had not been affected by the allegations.

A source close to Gome told AFP that the company had launched internal checks as early as Wednesday last week, without saying directly whether Huang had been detained.

The company released its third-quarter results Monday, showing net profits rising 111 percent in the first nine months from a year earlier to 1.59 billion yuan (US$230 million).

However, a conference call on the results was cancelled, said Erika Xu, an executive at Gome's investor relations department.

"It's because it's such a sensitive time, with the news report that has come out," she told AFP.

Caijing said Huang was allegedly involved in price manipulation of a company controlled by his brother, Huang Junqin.

The share price of one of Huang Junqin's companies, Jintai Co. Ltd., had fluctuated dramatically for almost the past two years, Caijing noted, without saying how Huang Guangyu was involved.

It is not the first time that Huang Guangyu's name has come up in connection with suspicions of financial wrongdoing.

He was accused of securing loans illegally in 2006, but was cleared of the charges in January 2007, the China Daily newspaper reported.

With assets of 18.4 billion yuan (US$2.7 billion), Huang was ranked as number two on a list of China's richest people issued by US magazine Forbes in October.

In 2006, Forbes ranked him as the nation's richest man with US$2.3 billion in assets.

Coming out on top in the Forbes rich list this year was Shanghai-based agricultural feed tycoon Liu Yongxing with a net worth of three billion dollars.

Several former celebrities who made it to the list in the past have subsequently run afoul of the law, typically over financial misconduct.

Zhou Zhengyi, the 11th richest Chinese in 2002 and the boss of Nongkai Group, was sentenced to 16 years' jail in November 2007 for bribery, embezzlement and tax fraud.

Zhang Rongkun, the 16th richest on the Forbes list in 2005 and the owner of Fuxi Investment, was sentenced to 19 years in jail in June this year for his role in a billion-dollar pension fund scandal in Shanghai.

Zhou Yiming, the 207th richest in 2005 and the chairman of Shenzhen Minglun Co. Ltd, which does electronics, trade and food processing businesses, was sentenced to life imprisonment in April 2007 for contract fraud.

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