Payment accusations prove taxing for Chinese show business
Claims against Fan Bingbing have been withdrawn, but others are in the firing line
Accusations of tax avoidance, death threats from a tycoon and a stock market rout. It has the ingredients for a blockbuster movie, but this is the saga being played out in the glitzy world of Chinese show business.
Well-known talk show host Cui Yongyuan unveiled the first act last week with sensational claims that China’s most famous actress, Fan Bingbing, had engaged in subterfuge to avoid paying tax on a payment for four days’ work on the Feng Xiaogang movie Cell Phone 2.
Cui released a contract showing that she was paid 10 million yuan (US $1.56 million) for her role; then he revealed a second contract that alleged she was in fact paid 50 million yuan ($7.8 million). The implication was that Cui had engaged in so-called yin-yang, where double contracts are issued for the same work to skirt tax obligations.
Fan, who shot to fame in “X-Men: Days of Future Past” and “Iron Man 3”, earned a reported 300 million yuan (US$$46.5 million) last year from film roles, sponsorship and celebrity endorsements and has a higher international profile than any other Chinese artist. She even appeared on the front cover of Time magazine in February.
Despite her denials, the State Authority of Taxation said it would proceed with an investigation into the financial affairs of film and TV companies, with a focus on yin-yang contracts. And Cui, who became a household name with a long-running chat show aired by state broadcaster China Central Television, was also not finished yet.
His next bombshell was an alleged 750 million yuan tax evasion case involving a number of high-profile figures in the industry. Cui hinted that he had a “full drawer” of such “star-studded” fake deals signed by celebrities, including some in Hong Kong and Taiwan.
The exposé has now taken a more ominous twist, with Cui revealing he has received a death threat from a “resourceful” show business tycoon, who was unnamed.
Cui said in an interview with the Hong Kong-based Apple Daily that he was not spooked by the threats and insisted China’s “top leaders” had long frowned upon shenanigans and wheeling and dealing in the entertainment industry. He denied that anybody had been feeding him the explosive information.
However, the Communication University of China, where Cui is currently a visiting professor, felt sufficiently alarmed to issue a statement expressing concern for his personal safety. Apple Daily reported that Cui is under 24-hour protection from a female bodyguard and that more whistleblowers have emerged.
Yet it seems the pressure has told on Cui, as he publicly withdrew the allegations against Fan on Sunday night and acknowledged she had nothing to do with the fact two separate contracts were released. He said these had not been prepared by an individual, but by a “gang”.
Whether Fan will pursue her threats to take legal action against Cui is uncertain, but the accusations of big shenanigans within the industry have stuck. The stock prices of listed production companies like Zhejiang Talent Television and Film, Wuhan DDMC Culture and Huayi Brothers have dipped in the past week.
Regulators may also be preparing for a clampdown. A slew of op-eds has appeared in the People’s Daily denouncing tax evasions and the declining moral standards of some public figures.