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‘Extortion’ website loses operator’s license
Print Edition
THE business news website at the center of an extortion scandal had its operator’s license revoked on Friday, nine days after eight of its employees were taken into police custody for their roles in the alleged crime.
All other workers at Shanghai-based 21cbh.com have been sent home pending a full investigation, Xinhua news agency reported yesterday.
The website is owned by 21st Century Media, a major player in China’s financial and business media industry, and affiliated to the Guangdong-based Nanfang Daily Media Group. Its flagship products include the 21st Century Business Herald daily newspaper, and the magazines 21st Century Business Review and Money Weekly. Several employees of Money Weekly have also been taken in for questioning, the Xinhua report said.
As well as the police probe, the Guangdong Administration of Press, Publication, Radio, Film and Television said it has begun its own investigation into the alleged scam, and has ordered 20 other media organizations in the province to conduct self-assessments.
Also on Friday, Nanfang Daily said it has sent a team to occupy the offices of 21cbh.com and has launched an inquiry into the wider operations of 21st Century Media.
The scandal surrounding the website came to light on September 3, when Shanghai police accused it of extorting money from companies in return for favorable coverage and quashing negative news reports.
It was allegedly aided by two public relations firms — Shanghai-based Roya Investment Services and Shenzhen-based investment consulting company Nukirin.
100 victims
Over the past 10 months, more than 100 companies have fallen victim to the scam, including many well-known names in Shanghai, Beijing and Guangdong, police said, though they did not release any names. The website frequently targeted firms that had a good reputation or were planning to list on the stock market, as they were likely to be more sensitive to the need for positive coverage.
Staff at 21cbh.com allegedly got the companies to sign “advertising contracts,” usually costing between 200,000 (US$32,600)and 300,000 yuan, that would guarantee them only positive coverage on the site. Those that refused to comply would be subject to exactly the opposite type of coverage, police said.
An initial estimate showed that the website had raised more than 100 million yuan from the dubious contracts, Xinhua said.
Among the eight people detained on September 3 were Liu Dong, president of 21cbh.com, and Zhou Bin, its editor-in-chief. Several reporters and employees of its marketing department, and the heads of the two PR firms were also held.
In custody, Liu tried to distance himself from the scandal, claiming he was under pressure from his parent company to secure advertising contracts.
He admitted, however, that: “Negative media exposure will hinder a company’s efforts to go public as the China Securities Regulatory Commission will investigate it or even revoke its listed qualification.”
Zhou agreed, saying that a company planning to list on the stock market will “pay any price to safeguard its image, regardless of whether the stories are true or not.”
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