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New facts emerge in media 'blackmailing' case

(chinadaily.com.cn) Updated: 2014-09-11 14:56

Further details surrounding the media 'blackmailing' case, revealed earlier, have been released by Shanghai Police, the Beijing Times reported. Several journalists at a financial website and PR firms were discovered to have allegedly used their influence to profit from targeted companies.

The probe into the website of 21st Century Business Herald, an influential business daily in China, began after tip-offs that it had blackmailed companies in exchange for positive stories.

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It is reported that the website established cooperative relationships with more than 100 companies since April 2010. It accumulated hundreds of millions of yuan by collecting 200,000 to 300,000 yuan ($32,624-$48,936) from each company.

Police found some website executives encouraged PR firms and journalists to seek listed companies, those planning to float initial public offerings (IPOs) or those undergoing restructuring. Targeted companies were forced to sign advertising contracts worth above-market rate to prevent negative reports being released.

Liu Dong,?president of the 21st Century Business Herald website, is among the suspects. He said: "The website has great power and influence. Companies about to issue IPOs gave us hush money in the form of signing advertisement contracts, which is equal to signing a protection protocol.

"Negative news of a company may hinder its process of listing, incur investigation from the securities regulatory body or even lead to delisting. Companies are usually eager to maintain a positive image at all costs. Negative stories are required to be withdrawn, whether they are true or not".

Liu also said listed companies would be affected in daily operation and by depressed stock prices due to negative reports.

 

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