A popular hoodie with a photo of Tao Huabi, founder of Lao Gan Ma chili sauce Photo: Xu Liuliu/GT

 Three people have been arrested by police for impersonating Laoganma marketing staff and forging company stamps to sign a contract with Tencent, in a bizarre twist of events after Tencent sued Laoganma for failure to pay contract fees after services were delivered. 

The three arrested by local police in Southwest China's Guizohu Province are said to have signed a marketing cooperation contract with Tencent, impersonating employees from chili sauce maker Laoganma's marketing department for the purpose of "obtaining gift codes for Tencent games" for resale, according to a police statement on Wednesday. 

Tencent said the marketing contract was signed in March last year and, believing an agreement had been made with Laoganma, it had already launched marketing promotions worth of tens of millions yuan but had not received any promotional fees.

Tencent later sued Laoganma over the unpaid advertising fees. On Tuesday a ruling was published by the Nanshan district court in Shenzhen, South China's Guangdong Province, in favor of Tencent's application to freeze 16.24 million yuan ($2.3 million) of assets under Laoganma. 

Laoganma on Monday denied signing any cooperation agreement with Tencent, and said Tencent had been cheated by imposters. The condiment company had called police about the incident on June 20.