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China Cracks Down on Box-office Fraud

| Apr 08, 2016 09:28 PM EDT

People walk beneath posters of "The Da Vinci Code" movie at the Xintiandi entertainment center in Shanghai, China, on May 18, 2006.

China’s film regulatory body has pledged to clamp down on cheating after box-office records in China’s booming movie market came into question following a recent scam.

While China's movie industry has generally developed in a "healthy, regulated" manner, cases of cheating have appeared and the government will punish any such fraud, said Luan Guozhi, deputy head of the movie bureau of the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).

The SAPPRFT has improved the digital system used to collect China's box-office receipts in 2015, and the statistics are "scientific and accurate," Luan said on Wednesday during a media event to promote the upcoming Beijing International Film Festival.

China's box-office receipts reached a record-breaking 14.47 billion yuan ($2.23 billion) in the first quarter of this year, a 51-percent increase over the same period in the previous year.

The announcement comes after the distributor of the martial arts film "Ip Man 3," which stars Donnie Yen and Mike Tyson, was punished by authorities after an investigation in March that revealed purportedly irregular ticket sales.

Some purported screenings of Ip Man 3 sold out unpopular hours, such as in the morning and midnight, when cinemas were virtually empty, according to the China Daily newspaper. The tickets were also found to have been sold at nearly five times the regular movie ticket prices.

Investigators said on March 18 that over 7,600 screenings of the movie, grossing a box-office tally of 32 million yuan, were fabricated, while 56 million yuan worth of tickets were purchased by the movies financiers.

Authorities suspended the operations of the movies distribution company, Max Screen of Beijing, for one month, and issued warnings to 73 cinemas and three online ticket-selling websites implicated in the scam.

Industry analysts said the case was different from other instances of box-office cheating, wherein figures were falsified to attract investors for future movies. In these cases, the numbers were manipulated to raise the stock price of the financing companies, said China Daily.

Shanghai Kuailu Investment Group, the main financial backer of "Ip Man 3," announced on Wednesday that it will return all of the cash it raised for the movie through various financial channels.

Zuo Heng, an associate researcher with the China Film Art Research Center, said the case with "Ip Man 3" has been long overdue and indicates the government's indication to regulate the market.

"Only when the laws and regulations are more predictable and preventive can such scams be eradicated," he said.

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