Secrets revealed after Beijing firm busted for helping cadres delete negative reports

PUBLISHED : Wednesday, 20 February, 2013, 11:33am
UPDATED : Wednesday, 20 February, 2013, 6:49pm

A secretive business that uses dubious tactics to take down negative stories on the internet for clients has reaped millions of yuan, according to an investigation by China’s Caixin Magazine published on Monday.

At the top is Beijing entrepreneuer and public relations expert Gu Tengda, who is now in police custody because of his company.  

Founded by Gu in 2007, Yage Times made a whopping 50 million yuan (HK$62 million) in gross profit in 2011 alone. It calls itself an information technology company, but insiders said its major business was getting rid of negative coverage for clients - for a price.

The Caixin report detailed a practice of bribery and blackmail. 

Gu typically charged clients tens of thousands of yuan to have a single article "disappear" from the internet. The price went up sharply - into millions of yuan - if the client wanted certain keywords blocked on popular search engines, said the report.

Yage Times helped a mix of clients, including renowned global corporations, state-owned enterprises and individuals.

But a majority of its business was with officials and party cadres from smaller cities in faraway provinces, known as "second-tier" or "third-tier" cities. Workers at the firm were trained prior to talking to officials so they could "serve" them better, said the report.

When at times bribing failed to work, Gu and his coworkers would send out forged official letters with fake government stamps that ordered articles to be taken down from the internet. Many believed this highly risky practice had lead to the company's downfall. 

In July, more than 100 law enforcement officers stormed into the firm’s Beijing office, shut down their operations and arrested more than 100 workers, including several managers and Gu himself.

The police investigation is still underway, but authorities have arrested four workers at Chinese search leader Baidu, said the report. Gu and several other managers remain detained. 

Perhaps nothing is more ironic than the fact that days after Caixin Magazine published the investigative piece, reposts of the story were quickly taken down from major Chinese news sites. It was not clear who had ordered the websites to delete these posts.

Original Caixin Magazine report ( subscription needed)