Even by the standards of China, Huang Guangyu's rise was meteoric. He left school and his impoverished home at 16. By 36 he was a billionaire, the founder of a retailing giant and the wealthiest man in the country.

But the entrepreneur's fall proved just as abrupt. At 41, he is beginning a 14-year prison sentence following his conviction for bribery, insider trading and illegal foreign exchange dealings.

His fortune was valued at between $2.7bn (£1.83bn) and $6bn. But in November 2008, shortly after he topped the Hurun rich list, he was detained and accused of manipulating stock prices. Today the state news agency Xinhua reported that a court in Beijing had jailed him, fined him 600m yuan (£60m) and confiscated property worth 200m yuan. His wife, Du Juan, was fined 200m yuan and sentenced to three and a half years for insider trading, Xinhua said.

Huang, also known as Wong Kwong Yu, was born into poverty in Chaoshan, southern China. He dropped out of school in 1985 and went into business with his elder brother with 4,000 yuan borrowed from friends and family.

Like many entrepreneurs at the time, they realised that cheap products from fast-developing southern China could be sold for considerably more in the north. It was not always smooth going. Huang once recalled trying to trade fabric, only to discover than no one liked the patterns he had chosen.

"The material and the issue of seasons made my head ache. I could not work it out. But electrical appliances are used by everyone, so there is not a big risk," he said.One story, possibly apocryphal, involves them stacking empty boxes on their stall because they could not afford stock. If a customer wanted a product, they would rush off to buy it from another vendor.

Huang proved equally canny when he founded the Gome chain of home appliance retailers. "Prior to Huang and Gome, the idea of retail in China was to get your customer into the shop and sell them something as expensive as possible," said Rupert Hoogewerf, whose Hurun rich list put Huang in the top spot in 2005, 2006 and 2008. "He turned that idea on its head and basically said: if you come to Gome, we will give you the best possible prices."

Huang also invested in advertising and launched aggressive takeover bids so the chain could keep expanding.

China's rapid urbanisation fuelled the boom. But doing business also required good connections."The nature of retail in the early days was such that each region probably had a dominant state-owned retail competitor. When you are dealing with these sorts of competitors, it wouldn't surprise me at all if you ended up getting into bed with some rather unpleasant characters," Hoogewerf said.

Five senior police and tax officials were detained or questioned in relation to the investigation into Huang, state media have reported. But while leaders have stressed the need to tackle widespread corruption, observers say prosecutions reflect personal connections as much as the seriousness of alleged crimes.

"[The case] shocked a lot of the entrepreneurial class - the fact he was taken down, but also the fact he allowed himself to be. It's one thing to be ambitious and have a good business but another not to have put in place protective measures - cultivating government relations that would be able to avoid things getting to the courts. He has to have done something pretty bad or upset someone pretty important," said Hoogewerf.

"The water is pretty murky."

What prompted the investigation is unclear, but some believe that attempts to cultivate friends in high places made him a target. "If you cosy up to a particular politician, by default that politician's enemies will be yours," Hoogewerf said.

"Huang's case is not unique; it gained more attention because he was the richest person in China," said Liu Shanying, an analyst at the Institute of Political Science in the Chinese Academy of Social Sciences. "If you want to do business, it is hard for you to make it big without a good relationship with government. Of course, [that] is not a bad thing....but during the process of building up a good relationship, it is easy for the owner of the power and the owner of the business to exchange interests privately."

Liu added that people had been expecting more senior officials to be named in connection with the case.Even if Huang serves his full sentence he will be only 55 when he is released. And while he resigned as chairman of Gome following his detention, he still holds a third of its shares. And last week three executives from Bain Capital – an American private equity firm that invested in the company last summer - were ousted from the board by shareholders affiliated with Huang. The executives were subsequently reinstalled. But it looks as if the tycoon's remarkable story may contain a few more chapters.