SHANGHAI—Guo Guangchang became a billionaire by investing where China’s economy was going over the past two decades: in sectors like steel, property and finance and increasingly overseas. On Friday Mr. Guo indicated judicial authorities are holding him during an investigation, a stark illustration of how Chinese businesspeople are coming under intensifying scrutiny.

After nearly two days of mystery over his whereabouts, a vague statement near midnight issued by his flagship investment conglomerate Fosun International Ltd….