Police in Shanghai have arrested a boss of a private information technology company after he was found to have been involved in creating and spreading online rumors, police sources said on Sunday.

Fu Xuesheng, 47, who was the chairman and legal representative of the "Shanghai LabInfo Technologies Ltd," was suspected of creating online rumors to slander his competitors as retaliation, police said.

Fu fabricated that Huang, who was a legal representative of an interior design and decorating company and died accidently in May, have bribed a deputy district head in Shanghai, where Huang's company located.

Investigation found that Fu and Huang were previously involved in financial dispute, and Fu's accusation against Huang was found to be a retaliative slander later.

After failing one of Sinopec's biddings in Dec. 2012, Fu took revenge against the winning bidder via slandering that they were involved in sex bribes, police said.

Police in Shanghai have solved more than 380 such cases.

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