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Business media execs under arrest

Xinhua, November 21, 2014

• Business media execs Shen Hao under arrest

  Executives of the influential 21st Century Business Herald were arrested by the No.1 Branch of the Shanghai People's Procuratorate yesterday.

  Those arrested included Shen Hao, president of the 21st Century Media Ltd, Vice President Chen Dongyang and Vice President and Chief Financial Officer Le Bing.

  The prosecutors accused the 21st Century Business Herald, the website affiliated to the publication Money Week, and eight companies under the group of blackmail and forcing transactions.

  Shen was also accused of duty encroachment, embezzlement and taking bribes as a non-state staff member.

  Shen and Chen were taken away by the police in late September.

  The police said the financial media outlet used negative news coverage to force enterprises to pay "cooperation fees" and demanded hefty "protection fees" reaching millions of yuan by promising not to publish negative reports about them.

  The company partnered with some public relations firms in Shanghai and Shenzhen to release negative reports about listed companies and those planning initial public offerings.

  "I knew that it was suspected of violations," Shen confessed.

  Police found Shen set high performance targets for subsidiary publications and websites to conduct the violations. Shen also cooperated with the PR firms to delete negative reports about their major clients.

  Shen and others forced nearly 100 companies to sign advertisement contracts, both directly or indirectly, with their subsidiary companies and publications. They are suspected of taking in more than 200 million yuan (US$32.7 million) by blackmail.

  Shen is also suspected of embezzling more than a million yuan by taking advantage of his post as publisher and president of the company. He was suspected of embezzlement using invoices of fabricated business spending.

  According to the police, Shen has since undergone a period of soul-searching after he was taken by the police for investigation on September 25.

  In a letter of remorse, Shen said "a strong feeling of being torn apart has long been making me suffer and I cannot help bursting into tears.

  "In retrospect of my past 40 years, I once had beautiful ideals and pursuits and had obtained decent fame and social positions. But now, I lost my freedom ...

  "An individual is but a tiny person, yet a media reporter carries sacred missions," he said of his early years as a journalist. At the time, he said, he was devoted to seeking justice, volunteered to promote compassion and valued conscience.

  When he changed from a media reporter to a manager, he said that he started to betray such beliefs.

  "The development of Internet technologies has produced subversive impact on the ‘ecology' of the media industry. I sensed a threat to traditional media and that has impacted my mentality," Shen wrote.

  "In recent years, my annual earnings reached about 2 million yuan, far more than I need for sustenance. However, I failed to control my greed and resist temptations."

  Shen added: "My experience should be taken as a lesson to warn my peers in the media industry."

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