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Gu Chujun, chairman of Chinese refrigerator maker Kelon, and two fellow executives were detained on Monday, according to sources with the Guangdong provincial public security department.
The company, Guangdong Kelon Electrical Holdings Co., was suspended from trading stock.
Kelon Chairman Gu Chujun, Deputy Chief Executive Yan Yousong and Assistant to the Chief Executive Jiang Yuan are being held for further investigation.
The China Securities Regulatory Commission started to probe Kelon in May, and ended the investigation on July 20, though the result was not made open to the public.
A 60-million-yuan (US$7.4 million) deficit in the Kelon 2004 annual report, contrasting blatantly with the 200 million yuan (US$25 million) in profit in the first three quarters, had caught public attention.
On July 8, a Kelon report said that the company received the resignation of its three independent directors, who claimed that they were forced to submit resignations because they couldn't fulfill their obligations due to various limits.
(Xinhua News Agency August 1, 2005)
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