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Chinese retailer GOME Electrical Appliances Holding, China's biggest electronic appliances retailer, on Wednesday denied a report that its chairman, tycoon Wong Kwong-yu, was under investigation for alleged illegal loans.

Huang Guangyu, the founder of GoMe Appliances, China's biggest electronics retailer, is listed as mainland China's wealthiest businessman. [newsphoto/file]

"GOME wishes to clarify that no notice has been received by it in connection with any investigation by any ... government authority," the company, which has shares traded in Hong Kong, said in a statement.

Trading in shares of GOME Electrical Appliances was suspended Tuesday pending its response to a report by the Chinese financial journal Caijing that Wong, one of China's richest men, was under investigation for alleged illegal loans.

GOME's statement said neither Wong or any of his companies were involved in any illegal loans and that "he and his privately held companies have a good track record of servicing its (their) debts with financial institutions."

The same was true of Wong's relatives, with the exception of Wong's eldest brother Wong Chung Yam, who had refused to answer questions about his own business dealings, it said.

Beijing-based Caijing, citing unnamed people familiar with the matter, said Wong Kwong-yu was being investigated over the alleged illegal bank loans.

GOME is in the midst of merging with Shanghai-based China Paradise Electronics Retail Ltd. Trading in shares of China Paradise was also suspended Tuesday.

Shares of GOME ended 1.2 percent lower Friday at 6.70 Hong Kong dollars (US$0.86; euro0.68), while China Paradise closed 0.4 percent higher at HK$2.28 (US$0.29; euro0.23).