Detained Shanghai editor admits to news site's bribery-extortion scheme

The detained chief editor of a major mainland business news portal appeared on a state media broadcast yesterday confessing to extorting hundreds of thousands of yuan from companies planning stock market listings.

According to a special task force investigating the alleged activities, the suspects targeted companies wanting to protect their reputation ahead of planned initial public offerings.

"Once a negative report is published, the companies [targeted] in the news would have to voluntarily come to us or ask for cooperation through public relations companies," Zhou said in his confession. "Cooperation would cost between 200,000 yuan [HK$252,000] and 300,000 yuan, normally in the way of advertising deals."

Most of the extortion occurred during the "quiet" period ahead of an IPO, when firms are banned from releasing any information to the public that could influence the price, even if it is to correct misleading reports, Xinhua said.

"These companies would pay all they could to maintain a positive image. It didn't matter if these reports were authentic or [fraudulent]," Liu was quoted as saying.