By Francis Markus BBC correspondent in Shanghai

State media have said he is suspected of stock manipulation and tax and accounting fraud, and of illegally using loans from the Bank of China.

Zhou Zhengyi is China's 11th richest businessman

With an exclusive home in Hong Kong, and a stable of cars reputedly including some of Italy's raciest models, the millionaire is among the most flamboyant of China's new class of tycoons.

But he is not the only one of China's super rich to fall foul of the law.

Next week the orchid tycoon Yang Bin, a Dutch national, is to go on trial in north-eastern China, charged with economic crimes.

But Mr Zhou's case could be among the most politically explosive.

Some analysts point out that many of Mr Zhou's dealings took place while the now vice premier, Huang Ju, was mayor of Shanghai.

So they see the case as potentially significant in the jockeying for power between China's new President Hu Jintao and those in his government, like Mr Huang, who are seen as former President Jiang Zemin's men.

A local lawyer, involved in a case filed by residents evicted to make way for one of Mr Zhou's developments, asserts that the tycoon's affairs are just part of a massive web of corruption surrounding Shanghai's real estate market.

But just how dramatic the consequences of his case might be will depend a lot on the secretive power politics playing out in the capital, Beijing.