Chinese Police Detain Reporters, PR Staff, In Case Involving Paid Journalism

They Are Suspected of Demanding Money to Slant News Coverage of Companies

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Police in Shanghai are investigating allegations that reporters and PR staff blackmailed companies.
Police in Shanghai are investigating allegations that reporters and PR staff blackmailed companies. Credit: Nikada/iStock Photo

Shanghai police detained the chief editor and other journalists at a well-read financial news website for allegedly blackmailing companies into paying for favorable coverage, one of the most high-profile cases yet of journalism for hire in China.

Eight people, some from the 21st Century Business Herald's website and others from two external public relations companies, have been taken into custody on suspicion of demanding money to slant their coverage of companies, most of which were planning initial public offerings, the official Xinhua news agency reported.

The suspects also published false and malicious reports about "uncooperative companies" that refused to pay, Xinhua said. At least 10 companies in Beijing, Shanghai and Guangzhou were blackmailed by the website since November 2013, Xinhua said.

The South China Morning Post reported that the PR staff worked for two local firms involved in public relations for the finance industry: Shanghai-based Roya Investment Services Limited and Shenzhen-based Nukirin. The companies did not answer the phone late Thursday.

The case is 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.

"If you want more good news, you need to pay; if you want less or no bad news, you need to pay as well," said Qiao Mu, a professor of media studies at Beijing Foreign Studies University.

State broadcaster CCTV's finance channel has been hit by a series of corruption probes since June. One of those detained was a star business news anchor who also owned a stake in a subsidiary of global PR firm Edelman from 2007 to 2010.

Meanwhile, the CEO of Edelman's holding company in China, Steven Cao, has been cooperating with authorities on an investigation. The company has not specified what that probe involves, but he is a former business partner of the CCTV anchor who was detained. In late July, Edelman said it had lost contact with Mr. Cao amid the inquiry, and there has been no update on his whereabouts since.

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The 21st Century Business Herald website will cooperate with police on the probe, according to a statement on its microblog.

The media company that runs the website also operates the newspaper of the same name, one of China's leading financial and business publications. The website, launched in 2008, has been run independently of the newspaper since 2009, with its own financial operation and a largely separate editorial team.

Still, Liu Dong, the head of the website who was detained in the probe, doubles as deputy chief editor of the newspaper. Liu is a veteran journalist with 20 years experience, Caixin magazine reported.

Corruption is more rampant in financial and business journalism because of "cut-throat competition and little regulatory mechanism" in that area, Mr. Qiao said.

"Also, censors turn to focus on the political area and give financial journalism a relative free rein," Mr. Qiao said.

-- Bloomberg News, with Ad Age staff --

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