The China Securities Regulatory Commission is reportedly looking into illicit deals between companies seeking an IPO and media organizations.
A general manager of a finance company said he knew of companies that paid as much as $3.2 million to prevent media agencies from going public with negative information.
As more media organizations reportedly catch on to the scheme and start soliciting bribes, companies’ IPO-related costs are being pushed higher and higher.
A staffer at a financial daily said his managers gave instructions to stop publishing “supervisory analyses” of companies about to launch an IPO, as the practice presented the appearance of “indirect extortion.”
Source: Caixin Net (财新网)
Benjamin Kessler is a contributing editor of the FCPA Blog and the editor of the China Anti-Corruption Handbook. This is the final week to order the handbook at 33% off and receive an annual subscription to China Compliance Digest at no extra charge.