China Journalist Extortion Charges Unveiled in Crackdown

A Chinese financial news website allegedly charged companies planning share sales as much as 300,000 yuan ($49,000) to avoid negative press, state media reported, as the nation continues an anti-corruption crackdown.

The site and two public relations firms allegedly collaborated to extort hundreds of millions of yuan from more than 100 companies since November 2013, the official Xinhua News Agency said yesterday, citing police. The site demanded payment for favorable coverage and withholding negative stories from its site, according to the report.

The allegations are the latest example of so-called “red-envelope journalism,” which ranges from cash gifts to friendly journalists to hush money to cover up unfavorable news. State broadcaster China Central Television has been hit by a series of corruption probes since June and last October a journalist at Guangzhou’s New Express newspaper publicly confessed to taking bribes to defame a listed machinery company.

The website would ask companies to sign advertising contracts valued at 200,000 yuan to 300,000 yuan in exchange for removing negative reports from its site, its editor-in-chief was cited as saying by Xinhua. The targets were companies from Beijing, Shanghai and the southern province of Guangdong that were planning initial public offerings or restructurings, Xinhua said.

Shanghai police detained eight people, including the website’s chief editor, journalists and workers from the public relations firms, on suspicion of demanding money to slant their coverage of companies, Xinhua reported Sept. 3. The website has said it will cooperate with the police probe.

21st Century Media Co., the website’s parent, also operates the 21st Century Business Herald, one of China’s leading financial and business newspapers. The site was started in 2008 and began running independently a year later, with its own financial operations and a largely separate editorial team, according to Xinhua.

— With assistance by Alexandra Ho

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