China's press regulator will investigate and overhaul the management of a newspaper, one of whose reporters has been arrested after repeatedly criticising a major state-owned construction equipment maker, state media said on Thursday. Chen Yongzhou, a reporter for New Express tabloid, confessed on state television on Saturday to accepting bribes for fabricating more than a dozen stories that claimed Changsha-based Zoomlion Heavy Industry Science and Technology Co. Ltd. engaged in sales fraud, exaggerated its profits and used black public relations tactics, accusations strongly denied by the company. 

Chen has been formally arrested on a charge of damaging Zoomlion's reputation, Xinhua news agency reported on Wednesday. The case comes as the government moves to crack down on freedom of expression by journalists, lawyers, whistleblowers and internet users. The press regulator's branch in the southern province of Guangdong, where New Express is based, had stripped Chen of his official reporting credentials, state radio said. It also ordered the publishers of the paper, the Yangcheng Evening News Group, to "carry out a full rectification" of NewExpress, "investigate the responsibility of the relevant staff and immediately revise its leadership", the report added. 

Problems found to exist at New Express would be "further dealt with in accordance with the law", it said, without providing further details. Chen's case caused a public stir when the newspaper published two large front-page commentaries last week asking authorities to "please release him" after he was detained – an unusually bold move in a country where newspapers self-censor to avoid repercussions from the government. 

On Sunday, New Express recanted its support for Chen and added its own apology, saying it had behaved unethically and damaged the credibility of the news media. Shares of Zoomlion surged on Monday after the news. Zoomlion told Reuters last week it had complained to Changsha police, who arrested Chen, leading critics to point to Zoomlion's influence over city authorities. It is not clear who bribed Chen, but Zoomlion has in the past accused its hometown rival, Sany Group Co. Ltd., of planting critical stories about it, accusations Sany has denied. 

The public feud between the two firms has sometimes turned ugly, with each accusing the other of using sleazy tactics to gain market share amid a slowdown in the industry. (Reuters)