US public relations firm Edelman has admitted that it co-owned shares in a Beijing-based company with Rui Chenggang, a star anchor at China Central Television, for several years despite an apparent conflict of interest on the latter’s part.
Rui, 36, was taken away by prosecutors last Friday amid a widening corruption investigation at the state broadcaster. While no official explanation has been given for Rui’s detention, Chinese media reports have revealed that he had owned shares in a Beijing-based public relations company while it provided service to his employer, CCTV.
Watch: CCTV presenter goes missing from show after being detained
A spokesman for Edelman told the South China Morning Post that it jointly owned Beijing Pegasus Public Relations Consulting with Rui between 2007 and 2010. Rui had been one of three founders of Pegasus in 2002, Beijing Industrial and Commercial Bureau records show.
In August 2007, Edelman acquired a majority stake in the firm, after which Rui held 7.9 per cent as a “non-active investor”, the Edelman spokesman told the Post.
The spokesman said that it “took longer than expected” for Rui to sell his shares in the company after Edelman took control.
“It was our expectation that Mr Rui was to be divested of his minority shares immediately after the acquisition,” the spokesman said.
In fact, Rui held his stake until August 2010, when he sold it to co-founder Steven Cao Gang. In 2012, Cao was promoted to the position of chief executive of Edelman’s China-subsidiary Daniel J. Edelman China Group.
While Rui was a shareholder in Pegasus, the company won several contracts with CCTV, Chinese news portal QQ.com has reported.
Edelman confirmed that on Tuesday, saying: “Pegasus was engaged by corporate sponsors involved in underwriting CCTV’s presence at Davos.”
Since 2008, Rui has participated at several events at the World Economic Forum in Davos and in Dalian. His profile page on the World Economic Forum website has been removed.
Several spokesmen for the World Economic Forum in China did not respond to emailed requests for comment.
Rui was a well-known host on CCTV’s financial channel, and has interviewed more than 30 heads of state, according to his profile on the state broadcaster’s website. He gained prominence with outbursts of populist patriotism. The anchor famously helped mobilise public opinion against a Starbucks branch in Beijing’s Forbidden City in 2007.
The 36-year old is the latest CCTV member of staff to be detained in a corruption investigation that led to the detention last month of his superior Guo Zhenxi, director general of CCTV 2.
Li Yong, deputy director of the financial news channel, and at least two producers have also been detained, Caixin Online reported.
Alan VanderMolen, vice-chairman of Edelman’s parent company DJE Holdings, told public relations industry publication The Holmes Report that the company had launched an internal investigation into its ties with Rui.