Billionaire Li Baohua detained in Xiamen

Li Baohua, chairwoman of a real estate investment group in Xiamen, Fujian province, has been detained by the local public security bureau on suspicion of obtaining funds illegally, the bureau told China Daily on Wednesday.

The 36-year-old billionaire is being investigated for allegedly disappearing with a vast sum after deceiving investors.

The bureau has received complaints from more than 10 creditors since July 2011 alleging that Li vanished after receiving a large amount of money, which she did not repay, said a bureau spokesman surnamed Ma.

Li's Mingda Group, which was established in 2008, initially specialized in the rental and management of luxury properties. By the time Li was detained, the company was also involved in logistics, and in the restaurant and karaoke bar businesses.

The businesswoman disappeared after her chain of karaoke bars went bankrupt in June 2011, the police said.

As the case is still under investigation, the exact number of creditors, and the list of the company's assets and liabilities cannot be provided at this time, the police said, adding that an official announcement will be made next week.

According to the Xiamen-based Strait Herald newspaper, Li's lenders are mostly from cities across Fujian province, and many of them had a close relationship with her.

The report said Li allegedly engaged in fraudulent conduct since 2007. She was said to have used a conman, who pretended to be an out-of-wedlock son of Hong Kong business tycoon Li Ka-shing, as a guarantor to get the investors' trust when asking for money.

Li's allegedly fabricated plans for real estate projects and oilfield development programs, for which she made false promises of high returns to entice investments.

In one of those real estate projects, an investor surnamed Wu, lost 8 million yuan ($1.26 million), while another investor surnamed Yang lost 4 million yuan, according to the report.

In 1999, Li was imprisoned for two years for fraud in Guangdong province.

Several years after she was released, Li started a trading company and built her business empire, the report said.

According to China's criminal code, a person convicted of financial fraud can get the death sentence if the amount involved is significant and if heavy losses were incurred by the State or by individuals.

However, there is public debate on whether the death penalty is suitable for non-violent financial crimes after Wu Ying, 31 - once one of China's richest women - was sentenced to death in 2009 by a local court in Jinhua, Zhejiang province, for illegally raising 770 million yuan.

In 2012, the Supreme People's Court did not confirm Wu's death sentence and sent the case back to the provincial court for re-sentencing, which eventually led to the court's pronouncement of the death penalty with a two-year reprieve.

Contact the writers at sunli@chinadaily.com.cn and humeidong@chinadaily.com.cn