East Star Airlines, based in the central city of Wuhan, confirmed its president Lan Shili had disappeared.

"The government has informed us that all we can tell the media is we have a problem in operations. We are also looking into president Lan's whereabouts," an executive, who declined to be named, told AFP.

"We don't believe president Lan would flee just because of the current difficulties."

Financial magazine Caijing reported Wednesday that Lan was taken away in the southern city of Zhuhai as he tried to flee China due to "heavy debt." He is now in Wuhan with his movements being monitored by police, it said.

East Star Airlines owes the Hubei Airport Group more than 60 million yuan (8.8 million dollars) in fees including house rent and take-off and landing charges, Caijing said, citing an unnamed source with the airport group.

It also owes an unknown amount of money to US leasing firm GE Commercial Aviation Services, which agreed in 2005 to rent East Star 10 planes for 15 years at the price of 300,000 dollars a month, the report added.

The Civil Aviation Administration of China ordered the airline to suspend operations from Sunday upon a request from the Wuhan government.

The government hoped the suspension would prompt East Star to accept an acquisition bid by China National Aviation Holding Company, parent of flag carrier Air China, but East Star rebuffed the takeover, Caijing said.

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