Beijing's latest major anti-corruption action, which already has ensnared at least two mainland bankers and a property developer, is now widening to art auction and investment circles, underscoring the complexity of the investigation.
Initially the investigation centered on two bankers at the Agricultural Bank of China (ABC) and China Minsheng Banking Corp. Both men were detained in May on suspicion of corruption and illegal gambling.
Now, the focus has turned to Beijing Bonwin Contemporary Art Investment, which says it is the first such art investment firm on the mainland and held ambitions to list on the Hong Kong stock market later this year.
Its chairman, Huang Yujie, was recently detained in Beijing. Huang was asked by local police and customs officials 'to assist with an investigation', people familiar with the matter told the South China Morning Post.
On the mainland, before a formal charge is laid, local police often use the phrase 'assisting with an investigation' when they want to detain people who are linked to a case, particularly in relation to possible economic crimes. These detentions can last for a few days or several months, and usually result in formal charges.
Bonwin originally asked JPMorgan to advise on its plan to launch an initial public offering of shares (IPO) in Hong Kong this year, but the Wall Street bank recently decided to cut its ties with the company, effectively killing the IPO, the people said.
'This is like an earthquake in the art world on the mainland,' said one of the people who asked not to be named due to the sensitive nature of the investigation. 'The more the government looks into it, the worse it will be likely to find, because this [art auction and investment] industry is full of tricks that outsiders won't usually know,' said the person.