Gome Electrical Appliance yesterday denied a mainland media report that its billionaire chairman and founder is under investigation for receiving illegal bank loans. Wong Kwong-yu, 37, named China's richest man last year, and his brother Huang Junqin, 39, borrowed 1.3 billion yuan from Bank of China's Beijing branch beginning in the 1990s and used it to speculate in the property and overseas stock and futures markets, according to a Caijing report. They never repaid the money, which was borrowed for false property and vehicle loan investments, the magazine said. Caijing said 27 people and 39 companies controlled by the brothers were named in a probe by the Ministry of Public Security, in which Niu Zhongguang, retired president of BOC's Beijing branch, was arrested before the October 1 national day holiday. Gome's current executive director, Du Juan, worked at the branch before marrying Mr Wong. 'Gome Electrical Appliance does not have any bad loans with any mainland banks, has never caused any loss to any financial institution and currently holds no loans from Bank of China's Beijing branch,' Gome said in a statement last night. It also said Gome, its affiliate Pengrun Real Estate, and Mr Wong are not being investigated by police at this time. Pengrun has sold property to a third company that is under investigation in connection with mortgages, the statement said. 'We heard two or three months ago that some banks were investigating this case but now it appears to have moved to a higher level,' BNP Paribas analyst Candy Huang said. 'The property arm is involved in this investigation and it has separate management from the retail side, so I can't say the [retail business's] share price will be seriously impeded, but this will definitely hurt sentiment.' Gome's Hong Kong-listed shares, which have gained 28 per cent this year, fell 5.5 per cent last week.