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11.06.2013 15:32

Dirty Clash of China's Heavy Equipment Heavies

Rival machinery manufacturers Sany and Zoomlion have been fighting an ugly battle that just got uglier
By staff reporters Zhang Boling and Yu Ning

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(Beijing) – The dramatic fall of a media mercenary has exposed a quiet, dirty war for clients, government favors and respectability between two of the world's largest heavy-equipment manufacturers.
 
It's a years-long war that's been largely hidden from the public eye, on a battlefield littered with charges and counter-charges of espionage, slander and back-door deals in the Hunan Province city of Changsha, home base for rivals Zoomlion Heavy Industry Science & Technology Development Co. Ltd. and Sany Heavy Industry Co. Ltd.
 
That these two companies have been at each other's throats was never entirely clear. No one knows, for example, who posted on the Internet false financial reports about Sany that scared investors two years ago and sank the company's bid for an initial public offering. Some blamed Zoomlion, but investigators following orders for a probe from then premier Wen Jiabao found nothing wrong.
 
The recent downfall of journalist Chen Yongzhou, however, changed everything. Widely reported across China was news that Chen, a reporter for the Guangzhou-based newspaper New Express, had been detained by Changsha police October 18 for allegedly writing lies about Zoomlion's finances in exchange for money.
 
Chen then confessed on national television that he had indeed penned a series of stories whose aim was to intentionally slander Zoomlion. He also said that he had pocketed 50,000 yuan after the stories were published between September 29, 2012 and August 8, 2013 in New Express.
 
Chen's detention-center interview appeared on a state-run CCTV news show on October 26. Without directly mentioning Sany, he claimed an unidentified middleman had arranged the deal. A close-up shot of Chen's signed confession was aired during the interview, and clearly written on the page was Sany's name.
 
Authorities have refused additional information about Chen. But looking back at the recent history of Sany-Zoomlion relations over the past few years, it's apparent that the journalist had put himself on the front lines of a battle between Sany and Zoomlion. And the war seems far from over.
 
Negative Publicity
 
Police started investigating Chen on September 9, the day Zoomlion officials filed a complaint against the reporter. The criminal case was officially opened a week later.
 
Specifically, Chen has been charged with damaging a corporation's reputation in connection with 10 of his articles published between September 2012 and June 2013. He faces up to two years in prison. No date has been announced for his trial.
 
But Zoomlion has also accused Chen of writing letters in June to the Hong Kong Stock Exchange and the Hong Kong Securities and Futures Commission, accusing the company of fraud. He submitted a similar complaint in July to the China Securities Regulatory Commission. Additional slander from Chen, claims Zoomlion, was posted online on his Sina Weibo microblog.
 
Company officials say Chen failed to seek their comments before writing. "Chen has never contacted with Zoomlion for any of his reports," said Gao Hui, Zoomlion's assistant to the chairman.
 
Police and Zoomlion officials have not publicly accused Sany of any involvement in the Chen case, nor have they commented on the signed confession with its Sany citation.
 
Nevertheless, the CCTV report and confession may have sealed the reporter's fate.
 
Chen admitted writing only one of the 10 articles published, with the middleman handing him the other nine stories which he then submitted to his editors at New Express.
 
The confession silenced critics of Chen's arrest, including some who had questioned the Changsha police department's handling of the case. And New Express immediately stopped campaigning for their reporter's release.
 
The Administration of Press, Publication, Radio and Television of Guangdong, a government agency that regulates journalists in the province, revoked Chen's license to practice journalism November 1. Around the same time, New Express' owner, Yangcheng Daily Group, sacked the newspaper's chief and deputy chief editors.

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