Chinese Media Firm in Corruption Probe

06 October 2005

Chinese advertising sales company Beijing Media Corporation is embroiled in a corruption scandal.

Six employees - including two vps - have been taken into police custody on suspicion of bribery. The company, which sells ad space for the Communist Party controlled Beijing Youth Daily newspaper, is also carrying out an internal investigation.

Selina Sia of investment bankers UBS in Hong Kong comments that the incident "reflects poor company management".

Beijing Media is the first Chinese media firm to sell shares to the public. It floated a 25% stake on the Hong Kong stock market at the end of last year.

Since then it has reported earnings of 170,000 yuan ($21k; €17k; £12k) in the first half of 2005, a dramatic fall from the 66.3 million yuan in H1 of the previous year. Share values have dropped 52% this year.

The company said in August it had sold fewer ads to property developers - a key source of revenue - following the government's decision to cool the real estate markets in Shanghai and Beijing.

Data sourced from Wall Street Journal Online; additional content by WARC staff