China’s largest social network operator Tencent swindled out of US$2.3 million by con men posing as chilli sauce producer

The dispute emerged earlier this week after a Shenzhen court said it would freeze 16.24 million yuan (US$2.3 million) worth of assets belonging to Lao Gan Ma at the request of Tencent Holdings, who had sued the manufacturer for failing to pay advertising fees under a 2019 contract

Lao Gan Ma in a statement said it never signed such a contract and had reported the matter to police

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Bottles of the Lao Gan Ma chilli sauce on a supermarket shelf. Photo: Wikipedia

Published: 3:49pm, 1 Jul 2020Updated: 3:49pm, 1 Jul 2020

Chinese police on Wednesday said Tencent appears to have been duped by a group of people masquerading as representatives of China’s best-known chilli oil maker, Lao Gan Ma, after the internet giant accused the latter of breaching a contract.

The dispute emerged earlier this week after a Shenzhen court said it would freeze 16.24 million yuan (US$2.3 million) worth of assets belonging to Lao Gan Ma at the request of Tencent Holdings, who had sued the manufacturer for failing to pay advertising fees under a 2019 contract.

Lao Gan Ma in a statement said it never signed such a contract and had reported the matter to police.

On Wednesday, police in the southern city of Guiyang said it had arrested three people accused of forging Lao Gan Ma’s company seal – used in China to formalise documents – and pretending to be staff from the firm’s marketing department who signed a cooperation agreement with Tencent.

“The aim was to obtain online game package codes that Tencent gave away as part of its promotional activities, which they later resold online to illegally profit,” Guiyang police said in a statement posted on its official Weibo account.

Tencent, China’s biggest video game and social media firm, did not immediately respond to a Reuters request for comment.