Confession & Apology Over “Untrue” News Reports

A pair of front-page appeals from ’s New Express newspaper sparked a campaign for the release of its reporter Chen Yongzhou last week. Chen had been detained on suspicion of unfairly damaging the business reputation of machinery manufacturer Zoomlion with his reporting. initially defended the accuracy of his articles, but on Saturday, state media reported that Chen had confessed to spreading disinformation against Zoomlion. From Xinhua:

At the request of others, Chen fabricated facts and wrote more than 10 reports based on supplied materials from Sept. 29, 2012 to Aug. 8, 2013 about Zoomlion’s “financial problems” without verification, bringing huge losses to the company and its share prices, police said late Friday.

[…] The middleman, believing negative impact had been made and expectations met, gave hundreds of thousands of yuan and thousands of Hong Kong dollars as “reward” to Chen several times, said the police.

Chen confessed that only “one and a half” of his more than 10 reports about Zoomlion were done after gathering information himself, while the rest were made based on provided articles. He even published some of the supplied articles on the New Express without reading them first. [Source]

Chen’s confession was also aired on state broadcaster CCTV, as the BBC’s Damian Grammaticas described:

In the footage, detained journalist is paraded for the camera. Handcuffed and flanked by police officers he is marched along a corridor. Then he sits, a lone figure in a green police-issued top, in an interrogation room, making his purported confession. He’s clearly susceptible to pressure.

In many countries Chen Yongzhou’s detention, and the broadcast of the footage of it, would provoke a legal outcry. Corruption is known in Chinese , stories planted to blacken rival firms. But the facts of this case are murky and this “confession” does little to clear them up.

All China’s major construction equipment firms have been under severe financial pressure recently as the economy, so reliant on construction, has slowed. And after Mr Chen’s newspaper printed a brave and highly-unusual front-page call for his release, the police have been under pressure too. [Source]

New Express claimed in its original editorial that it had “diligently studied all 15 of the reports Chen Yongzhou wrote about Zoomlion,” and found only a single error. An anonymous senior executive told Xinhua that “we did not discover Chen did anything that was against professional ethics and laws.” Following the broadcast of Chen’s confession, however, the newspaper also changed course. From South China Morning Post:

“This newspaper was not strict enough about thoroughly fact-checking the draft of the report,” it said in a small announcement on a bottom corner of its front page.

“After the incident occurred the newspaper took inappropriate measures, seriously harming the public trust of the media.”

[…] A journalist with New Express said on condition of anonymity that the paper was forced to print the apology. “It was an order from above. It’s a day of disgrace for New Express.” Last week the paper ran two front-page appeals calling for Chen’s release.

Another reporter said: “The paper had good and pure intentions to start with, which was to project its own reporters and their journalistic rights. But regrettably, we can’t possibly beat more potent government power. Chen was just cannon fodder.” [Source]

Chen’s confession has failed to lay criticism of his detention to rest, however. From William Bi and Wenxin Fan at Bloomberg News:

’s broadcast of Chen’s alleged confession and the newspaper’s apology “makes a complete mockery of this ’China is a country under rule of law’ nonsense that we get fed,” said , 42, founding director of Danwei.com, a Beijing-based firm that researches China’s media and Internet. “I don’t know the specifics of this case, but you don’t get a confession on CCTV unless there is some political element to it.”

[…] “No matter he’s guilty or not, there are serious issues with the procedures here,” Abe Yang, a lawyer with Dacheng Law Offices in Shenzhen, said in a telephone interview, referring to the airing of the program and Chen’s statement. “Even if the police believe they have enough evidence, it’s up to the court to decide whether he’s truly guilty.”

[…] “Journalists are concerned that this will set a bad precedent for local governments to suppress the media to protect their businesses,” said Zhang Zhi’an, deputy dean of the School of Communication and Design at Sun Yat-sen University in Guangzhou. “Because only the primary state media are reporting the case, it’s very difficult to get closer to the truth about what exactly is not correct in those reports and whether and how the journalist took money.” [Source]

The televised confession followed others by venture capitalist Charles Xue and British consultant Peter Humphrey. This trend has caused some concern, expressed in a cartoon by Wang ‘Rebel Pepper’ Liming depicting CCTV’s Beijing headquarters:

On Friday, before Chen’s confession emerged, Caixin’s Ren Zhongyuan examined the history of China’s laws against “fabricating stories and spreading them to damage another person’s business reputation”:

Xu Xun, director of the Communication Law Research Center at China University of Political Science and Law and an expert on libel, said that in recent years there have only been a few cases of journalists being held responsible on the charge of damaging a business’s reputation.

Of these, one person was sentenced to a year in prison and the rest were fined. The jailed journalist worked at Beijing TV and had made up a story that stuffing in steamed dumplings in restaurants in the capital were made of wastepaper.

[…] Xu said if there were problems with a news story, the victim should first report the problem to the media outlet that published the report or the journalists’ association. They could also file a libel case in court.

“Using the police to pursue a criminal case and arresting the journalist should be the last step,” Xu said. [Source]

Also on Friday, South China Morning Post’s Patrick Boehler noted that Zoomlion stock appeared to have suffered more in the aftermath of Chen’s detention than it did from his reports:

In Hong Kong, the company’s share price tumbled more than 9 per cent in two days, losing about HK$930 million in market capitalisation. In Shenzhen, the loss amounted to around HK$2.5 billion. The company lost HK$3.46 billion [US$446 million], including unlisted shares, in market capitalisation over the two days, until the campaign was halted by order of the Propaganda Department.

Chen has written a series of articles on Zoomlion over the last 18 months. One, which he wrote in May, suggested the company falsified sales figures. It led to a drop of 5.4 per cent in the share price – pulling it to its lowest level in two years.

Yet, on average, his reports failed to harm the company’s reputation among investors. Zoomlion’s share price actually rose nine times out of twelve on the Hong Kong exchange on days he published an article about the company. [Source]

Reuters reports, though, that the shares rebounded on Monday following the New Express apology.