Eight Shanghai journalists, PR executives detained over alleged extortion scam

[BalanceOfPower]

Eight Shanghai journalists, PR executives detained over alleged extortion scam

Suspects said to have extorted cash from firms by threatening to run critical reports

PUBLISHED : Thursday, 04 September, 2014, 1:16pm
UPDATED : Friday, 05 September, 2014, 3:06am

Laura Zhou and Alice Yan

The suspects allegedly forced companies to pay for flattering coverage or else face critical reports from the news website. Photo: AP

Shanghai police have detained eight people from a financial news website and two public relations firms for allegedly threatening to print critical news reports about companies if they did not pay to suppress them.

Police have detained the editor-in-chief and the deputy editor of 21cbh.com a financial news website linked to the 21st Century Business Herald newspaper.

Also held were senior executives at the finance-related PR companies Roya Investment Services, based in Shanghai, and Shenzhen-based Nukirin. They have been accused by the police of obtaining huge gains by blackmailing companies, China Central Television reported.

The financial news website issued a statement on its social media account yesterday saying its staff had been taken away by police on Wednesday night and it pledged to co-operate with the investigation.

A CCTV report shows one of the suspects, whose identity was unknown, being hauled away by police. Photo: Screenshot

Since November, the suspects had allegedly approached companies that were planning stock market listings or business restructuring or upgrades and then published reports that exaggerated the positive side of the firms and ignored the negative if the companies were willing to pay up.

The financial website posted reports attacking firms that refused to pay, putting pressure on them to place adverts or come up with cash, the state television report quoted police as saying.

Police in Guangdong, Beijing and Hunan province are helping with the investigation, as dozens of companies from these areas are involved in the case.

Paying for media coverage is banned on the mainland, but the practice is common, including in state-owned media.

The State General Administration of Press, Publication, Radio, Film and Television said in June it would revoke the licences of media organisations that had taken bribes in exchange for news coverage and offending journalists' press cards would be withdrawn.

A screenshot of the website of 21st Century Business Herald. Photo: SCMP Pictures

A Shanghai-based PR manager for a US company, who asked not to be named, said she had been approached by mainland journalists who either told her directly to buy advertisements or hinted that she needed to buy them in exchange for writing a story.

"We usually give mainland journalists 'travelling expenses' for their work writing reports for us, but even with that some journalists said the reports won't be published until we buy advertisements in their media," she said.

An advertising manager for a Guangzhou-based private company said he had often experienced extortion attempts by journalists who threatened to publish negative reports about his firm.

"At first we were nervous, but over the past few years we have seen too many of these kinds of journalists, mainly from tabloids or from outside Guangdong, and we are experienced in dealing with their request by ignoring them or negotiating with them to cut the advertisement cost if what they write is important to us," he said.