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Chinese Reporter Says on State TV He Filed Fake Reports for Cash

A woman reads a New Express newspaper in a library in Guangzhou, China that on October 23, 2013 carried an editorial with the headline
A woman reads a New Express newspaper in a library in Guangzhou, China that on October 23, 2013 carried an editorial with the headline "Please Release Our Man," in regards to Chinese journalist Chen Yongzhou, who was recently detained by police for fabricating reports on a state-owned company. Source: AFP via Getty Images

Oct. 27 (Bloomberg) -- A Chinese journalist detained by police from Hunan province for allegedly defaming a state-owned company said he accepted payments in exchange for releasing fabricated reports, China Central Television said.

In footage broadcast as part of a nine-minute report aired yesterday, Chen Yongzhou was heard to say in an interview with two uniformed police officers that the information he released was “absolutely not objective.” Handcuffed and with his head shaved, the reporter for the Xinkuaibao newspaper said, “I’m willing to admit to the crime and repent.”

The report by state-run CCTV and Chen’s televised statement followed two front-page appeals last week by the Guangzhou-based Xinkuaibao, or New Express, for police in the central city of Changsha to release the 27-year-old reporter, who was detained Oct. 18. His arrest has drawn attention to the rights of journalists in China and follows a ruling by the country’s Supreme Court last month that people who post defamatory comments online could face as much as three years in jail.

“No matter he’s guilty or not, there are serious issues with the procedures here,” Abe Yang, a lawyer with Dacheng Law Offices in Shenzhen, said in a telephone interview, referring to the airing of the program and Chen’s statement. “Even if the police believe they have enough evidence, it’s up to the court to decide whether he’s truly guilty.”

Shares Drop

In an English-language report yesterday, the official Xinhua News Agency quoted police as saying Chen wanted to apologize to Zoomlion Heavy Industry Science and Technology Co., stock investors and his family and warn his peers to “learn a lesson from myself.”

Chen wrote stories questioning the finances of Zoomlion, a construction-machinery maker based in Changsha, the capital of Hunan province. Its shares fell in Hong Kong trading last week after reports of the journalist’s arrest brought renewed attention to the allegations. The stock rebounded 1.8 percent on Oct. 25 after plunging more than 9 percent in the previous two-day period.

Zoomlion in February and May denied allegations by the paper that it falsified sales. On May 28, the company said an article accusing it of improperly accounting for sales was “distorted” and “misleading.”

The Xinkuaibao hasn’t responded to the CCTV report on its website or microblog.

Soliciting Prostitutes

Chen is the latest subject of a police investigation to be shown on state television saying he committed wrongdoing. American-Chinese venture capitalist and celebrity blogger Charles Xue, who was detained in August on charges of soliciting prostitutes, appeared on television the following month and said the charges were true. Xue, who wrote on politically sensitive topics to his 12 million followers, also said he behaved irresponsibly in forwarding comments to his followers.

In July, Liang Hong, vice president and operations manager in China for London-based GlaxoSmithKline Plc, said in questioning shown on television that he used a travel agency to bribe officials and hospitals. The company is part of a probe by Chinese authorities into corruption in the pharmaceutical industry.

In its broadcast yesterday, CCTV aired footage of Chen dressed in a detention-center vest over a check shirt. “These articles were not written by me,” Chen was heard telling the officers. “After they provided me with original drafts, I redid them, and then took to have them published.”

Wealth, Fame

Chen was motivated by wealth and fame, CCTV said in its report, citing the police. He was asked by other people, who weren’t named in the report, to release more than 10 pre-written articles under his byline which “negatively affected” Zoomlion, in exchange for hundreds of thousands of yuan of payments, according to CCTV. He also told the investigators he was paid 500,000 yuan ($82,000) for notifying regulators of the company’s practices, CCTV said, citing the police.

The stories alleged Zoomlion was involved with “losses” of state assets, irregular revenues and forging sales and financial information, according to the CCTV report. The government of Hunan owned 16.2 percent of Zoomlion at the end of 2012, according to the company’s annual report.

‘Serious Impact’

Police in Changsha received a complaint from the company on Sept. 9, set up the case on Sept. 16, and arrested Chen in Guangzhou on Oct. 18 after “possessing a large amount of evidence,” CCTV said in its report. His stories circulated widely on the Internet and created a “serious impact on society,” according to the police, it said.

Zoomlion filed a complaint against Chen with local police earlier this month, according to a media official who asked not to be identified because of the company’s rules, Bloomberg News reported on Oct. 23.

Xinhua said in its report that Chen was detained “on suspicion of damaging business reputation.” He has worked at the Xinkuaibao as a reporter since graduating in 2009, it said.

CCTV said Chen was “criminally detained” in a Changsha jail. He was taken by two guards to face questioning by police investigators before signing a written statement, it said. A clip of the room showed a slogan written in blue on a white wall stating “extorting confessions is strictly forbidden” and an electronic clock showed a time of 12:36 on Oct. 25.

Propaganda Orders

Xinkuaibao last week made two front-page appeals for Chen’s release. The issue should be handled according to the law and reporters should not be first detained and then sentenced, the paper said in its second article on Oct. 24. The paper’s website hasn’t been updated since that date.

China’s media are mostly state owned and regularly receive instructions from propaganda authorities on what to cover, making it unusual for newspapers to make a public stand.

Another journalist at the Xinkuaibao, Liu Hu, was arrested Sept. 30 after posting allegations of wrongdoing by government officials online. His lawyer Zhou Ze said on Oct. 10 he faced a charge of defamation and had been in detention since Aug.24.

To contact Bloomberg News staff for this story: William Bi in Beijing at

To contact the editor responsible for this story: Jim McDonald at

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