Bloggers detained for posting false stories

Two bloggers have been detained in northern China on suspicion of posting fictitious stories about the head of a major dairy company, and may have contributed to a sharp decline in the company's share price.

Liu Chengkun and Zou Guangxiang are accused of defaming Pan Gang, chairman of Inner Mongolia Yili Industrial Group, in a series of WeChat posts beginning on March 24.

Police detained the pair recently in Hohhot, Inner Mongolia autonomous region, and have handed them over to local prosecutors, the city's public security bureau said in a statement on Monday.

Liu is accused of posting three fictitious articles under his public WeChat account, Tianlu Caijing, suggesting that Pan had been detained by police for investigation after returning from a trip to the United States.

Zou made a post on March 26 that said Pan had "disappeared" after returning from the US, despite being told earlier by Yili Group that the information was false, the statement said.

The stories drew public attention. A report by Beijing Tongdafazheng Forensic Identification Center said Zou's story was viewed nearly 6 million times; Liu's was viewed more than 10,000 times.

On March 26, Yili Group's market value fell by more than 6 billion yuan ($940 million) from the previous trading day, according to materials provided by the Shanghai Stock Exchange, where Yili has been listed since 1996.

Yili Group issued a statement on Sina Weibo in early April saying that Pan had received treatment in the US in March and dismissing the Liu and Zou articles as rumors.

Hohhot police went on to confirm that there was no record of Pan re-entering China after leaving for the US on Sept 5.

"The stories written by Liu Chengkun and Zou Guangxiang received millions of hits online, which confused the public and caused financial losses to the company and even China's dairy market," said Xing Haoyu, a prosecutor in Hohhot.

He said Liu confessed that the stories were fictions, yet they had damaged Pan's reputation, so they constituted the crime of defamation.

Yili Group did not respond to requests for a comment on Monday.

Yuan Hui in Hohhot contributed to this story.