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Fog-wreathed paradise, built by a billionaire under a cloud

Inside the hotel's front entrance, a white mechanical yak nods and says "Moo." Beyond it is the centerpiece of the compound: a vast glass atrium with a replica of a Tibetan and ethnic Qiang village filled with three-story stone and wood buildings, each housing a restaurant or bar. Corn husks sit atop the roofs.

For visitors, this is the first sight of paradise, or more precisely Jiuzhai Paradise. One of the biggest hotels in China when measured by number of rooms — 1,010 of them spread across seven buildings — it is part of a mountain resort nestled in a fog-wreathed forest in a Tibetan area of western China. What draws tourists is its proximity to the Jiuzhaigou Nature Reserve, the most famous park in the country, a wonderland laced with emerald lakes that is China's equivalent of Yellowstone or Yosemite.

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The Jiuzhaigou region in China's Sichuan Province.Sovfoto | UIG | Getty Images

That this kind of hotel could be built on such pristine land is a testament to the political connections of its founder, Deng Hong, a billionaire and one of the most famous businessmen in Sichuan Province.

People with knowledge of business and politics in Sichuan said Mr. Deng was close to Li Chuncheng, the deputy party chief of Sichuan who is now being investigated by the Communist Party's anti-corruption commission. Mr. Li was detained in December 2012, and the inquiry has been widened to other powerful figures in Sichuan.

On Nov. 8, Xinhua, the state news agency, posted on its website an article from Beijing News that said Mr. Deng had been formally arrested. Police officers in the city of Xianning, where Beijing News said Mr. Deng was being detained, declined to comment, as did representatives of Mr. Deng's company.

Mr. Deng, 50, the son of an air force officer, made his fortune in the hotel and exhibition center business. He was listed by the 2013 Hurun Rich List as the 290th richest person in China, with a net worth of about $1 billion.

He has an ambitious list of projects, including the New Century Global Center, a mall and hotel complex in Chengdu that is the world's largest building, but Jiuzhai Paradise is the one most dear to him. A painter and calligrapher, Mr. Deng designed the hotel and often stayed there with his family.

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"I think the whole hotel represents his vision," said Tyson Wang, the general manager, who works for InterContinental Hotels Group, a British company. It has been contracted to manage 13 properties developed by Mr. Deng's company, including resorts in the Maldives and Micronesia and a 2,000-room hotel in Lhasa, Tibet.

Mr. Deng envisioned Jiuzhai Paradise as what the Chinese call a "lost city in the mountains," Mr. Wang said. "From a distance, you see nothing. All of a sudden, there's a giant five-star."

But Mr. Deng has not been to the resort in about a year, Mr. Wang said, and the Beijing News article said his last public appearance was in Chengdu in February last year. The corruption investigation in Sichuan appears to run parallel with an even more delicate one that is scrutinizing former executives at state oil companies and the family of Zhou Yongkang, a former Sichuan party chief who retired in 2012 after years overseeing China's state security apparatus and legal system while on the elite Politburo Standing Committee.

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