Police have uncovered an elaborate blackmail operation at 21cbh.com, a Chinese financial website affiliated with the 21st Century Business Herald newspaper group, which has received hundreds of millions of yuan in illegal gains from companies in exchange for positive news coverage.
Since April 2010, the website had been collecting protection money from more than 100 companies which are either launching an initial public offering (IPO) or already publicly listed, the Beijing Times reported on Thursday, citing police investigators.
Earlier this month Shanghai police arrested the website’s chief editor Liu Dong, his deputy Zhou Bin and several staffers on suspicion of engaging in blackmail.
Investigation showed that the suspects colluded with two public relations agencies — Roya Investment Services Shanghai and Shenzhen Nukirin Investment Services — to extort money from companies by threatening to publish negative news about them.
Liu has confessed that the PR agencies acted as liaison between the listing candidates and 21cbh.com, and advertising contracts were signed in exchange for positive news about the companies, the report said, adding that this has been the main source of income for the news website.
Companies seeking to launch an IPO would readily sign an advertising contract with 21cbh.com to avoid negative news which could derail their listing, Liu was quoted as having told police.
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