China shuts down business newspaper's website amid extortion scandal

BEIJING (Reuters) - China has shut down a respected business newspaper's website and opened an investigation, state media said on Friday, after executives confessed they extorted "huge payments" from companies in exchange for quashing critical stories.

The official Xinhua news agency reported last month that eight suspects, some working at the 21st Century Business Herald and others at public relations firms, were under investigation.

Liu Dong, president of the paper's website, and Zhou Bin, the website's editor-in-chief, had colluded with colleagues and two financial public relations firms to solicit protection money from firms that were about to list or be restructured, Xinhua said on Thursday.

The Guangdong provincial branch of the State Administration of Press, Publication, Radio, Film and Television initiated an investigation into suspected economic crimes at the website of the Herald, Xinhua said, adding that its parent company had dispatched a team to "restructure" the paper. "The 21st Century Herald website has been shut down, all website qualifications and personnel have been dismissed, and the company written off," Xinhua said on its official microblog.

The post did not give further information. The Herald could not be reached for comment.

Liu and Zhou appeared on state broadcaster China Central Television (CCTV) in bright orange garb confessing to the crimes on Thursday.

The two were taken into custody last week along with an advertising manager and a reporter. Two executives at financial public relations firms Roya Investment Services Limited, based in Shanghai, and Nukirin Investment Advisory, in the southern city of Shenzhen, were also detained.

The group had extorted money from more than 100 companies since November 2013, Xinhua reported. They demanded "huge payments" for positive coverage, as well as "protection money"to kill negative reports.

The website would charge companies between 200,000 yuan (S$41,200) and 300,000 yuan (S$61,800), in the form of advertising contracts, to delete critical articles.

State media has been the key vehicle for ruling Communist Party propaganda, but reforms over the past decade have allowed greater commercialisation and some increase in editorial independence.

The move comes amid a crackdown at CCTV, where prosecutors have detained a top news anchor and a senior executive is being investigated on suspicion of bribery.

China media watchers have said blackmail is widespread in the domestic press and journalists are susceptible to bribes.

Last year, the 21st Century Business Herald published a series of stories alleging bribery among foreign and local pharmaceutical companies, citing unidentified whistleblowers.

Join ST's Telegram channel and get the latest breaking news delivered to you.