It may turn out that Mr Guo was simply giving evidence to an inquiry into corrupt officials, and is not himself under any suspicion. Even so, the high-handed treatment of such a prominent business figure is worrying. It is not just a reminder of the lack of due process and transparency in China’s weak and politicised legal system; it also sends a message that the party can do what it likes, to whomever it likes.

T.J. Wong of the Chinese University of Hong Kong Business School points out that what he calls the “original sin” of Chinese private business provides a mechanism for the party leaders to take down any tycoon they choose to. Thanks to Mao Zedong’s destruction of capitalism and the rule of law, most private businesses got started in legal limbo. “A lot of assets did not have defined property rights, and tax rates were often negotiated,” notes Mr Wong. So even if an entrepreneur is not corrupt, there will be enough ambiguity in his past to paint him as a crook if that suits the leadership.

The risk posed by such an event is greater for investors in private firms than for those in state-backed companies. The guanxi (web of connections) of a state firm remains even if its boss is removed, but if the founder of a private firm is arrested, its guanxi may simply evaporate.

Already, this episode has jeopardised Fosun’s bids for Phoenix Holdings, an Israeli insurer; BHF Kleinwort Benson, a British merchant bank; and Hauck & Aufhauser, a German private bank. On December 14th S&P warned that “an extended investigation of Mr Guo could potentially have a negative impact on the company’s access to funding.” The next day Moody’s, another credit-rating agency, applied a “negative outlook” to the debt of Fosun International, the group’s main listed arm—that is, it gave warning of a potential downgrade of its rating.