Journalists, PR firms caught 'blackmailing'

Several journalists and heads of public relations firms were arrested Wednesday for allegedly blackmailing companies in exchange for positive stories, according to People's Daily.

Both the chief editor and deputy chief editor with other journalists at the website of the 21st Century Business Herald, an influential business daily in China, and heads of two PR companies have been accused of blackmail.

The suspects targeted companies with the threat that the website would publish negative news about them if they were not paid.

The victims were mainly companies that were planning to float initial public offering, were already listed or were undergoing restructuring.

The gang of eight reportedly told these firms that they would exaggerate facts and cover flaws if these companies cooperated with them.

Dozens of companies, many of them based in Beijing, Shanghai and Guangdong allegedly became victims of the blackmail. They were also forced to sign advertisement deals or business partnership agreements with the website and the PR firms often at prices that hit these companies bottom line.

There have been a growing number of media scandals in recent years in China. In June, Guo Zhenxi, director of China Central Television's finance and economics channel, was investigated on allegations of bribery.

"We are facing a battle against fake news, paid news, and soft advertising in news," said Hu Zhengrong, vice-president of Communication University of China, in 2010.

According to the regulations issued by the Publicity Department of the Communist Party of China Central Committee in 1997, media companies are not allowed to take money from sources or subjects when collecting, editing or publishing news.