SHANGHAI - CHINA'S Gome Electrical Appliances has suspended its billionaire chairman Huang Guangyu from executive duties amid a police probe into his financial activities, state media reported on Friday.

Gome suspended Mr Huang, effective on Tuesday, due to his 'inability to perform his duties as a director", the Shanghai Securities News reported, citing a filing with the Hong Kong Stock Exchange.

Mr Huang's wife, Du Juan, who was a director of Gome, has also resigned due to the ongoing investigation and her close association with Mr Huang as his wife, the report said.

Mr Huang, 39, the founder of Gome, was ranked number two on a list of China's richest people issued by US magazine Forbes in October with assets of 18.4 billion yuan (US$3.9 billion).

The official Xinhua news agency has reported Huang is suspected of manipulating share trading in two mainland-listed companies, citing China's Securities Regulatory Commission.

Gome acknowledged in late November that police were investigating Huang, over a 'certain suspected economic crime", following a similar statement from the police earlier.

At the time the Hong Kong-listed Gome said Mr Zhou Yafei, chief financial officer of the household appliance giant, was also under investigation.

But the statement said the investigations were not related to the company and insisted that the assets and funds of the Gome Group were not misused.

Gome appointed Mr Chen Xiao, an executive director and the chief executive officer of the company, as the acting chairman in November. Trading in company shares has been suspended since Nov 24 -- AFP.