The front cover of the New Express that demanded Chen's release on October 23. Photo: IC

A still image of Chen Yongzhou captured from the CCTV report. Photo: IC

In a massive turnaround from their defiant stance a day earlier, the Guangzhou-based New Express newspaper on Sunday printed an apology, which rocked China's media establishment: "Chen Yongzhou, a reporter from this newspaper, took money to publish a quantity of false reports … and our paper didn't carefully scrutinize the articles. Furthermore, the inappropriate actions taken afterwards severely damaged our credibility and we were taught a lesson."

The New Express had been using large front page headlines two days in a row to demand police release Chen after he had been detained by police from Changsha, Hunan Province, on accusations relating to false reports and accepting bribes.

The newspaper had been backing his stories, which had been alleging financial fraud and losses of State assets by domestic construction machinery manufacturer Zoomlion, until Saturday, when Chen confessed to the nation via a broadcast on China Central Television (CCTV) that he had made it all up in order to receive tens of thousands of yuan in bribes, and had just published information that had been handed to him.

Whilst most of Chen's reports failed to harm Zoomlion's share prices - in most cases, they rose on days the reports were released - shares on Hong Kong's benchmark Hang Seng index tumbled in the wake of his detention. After the newspaper apology, Hong Kong listed shares in Zoomlion opened up by over 9 percent on Monday, Reuters reported.

The confession was a blow for media outlets around the country, including the All-China Journalists Association and the Xinhua News Agency, which had been demanding the Changsha police explain the detention and ensure Chen's safety.

The surprise confession has created more questions than answers.

Although the CCTV report gave extensive details about Chen's misdeeds, few details were given about the person or people who had paid him. The facts that Zoomlion, a powerful State-owned company, is based in Changsha, and that Changsha police traveled to Guangzhou to arrest Chen, have also prompted Net users to speculate as to whether the arrest and confession are part of a mysterious power play.

Some lawyers and legal experts are also asking how CCTV had access to Chen's testimony and why he is being given a trial by media in the midst of an investigation, while the public wonder whether corruption has become endemic within the media industry.

Trial by media

"He is innocent until proven guilty. The police and the television network have publicized selective information before the trial," Wang Sixin, a law professor with the Communication University of China, told the Global Times, saying that this was out of step with judicial procedures. "Any verdict on Chen would need to be made in court based on solid evidence rather than just his confession," Wang said.

If Chen is tried and found guilty of maliciously damaging the reputation of a business, he could face up to two years in jail, according to China's Criminal Law.

His sentence would depend on the credibility of the stories and whether Chen has fabricated the stories on purpose to damage Zoomlion's reputation, said Zhou Ze, a lawyer at the Beijing Wentian Law Firm. "Taking money from someone while fabricating reports could just be a breach of journalism ethics. The evidence would need to show the reporter knew the consequences before publishing them," Zhou said.

The New Express may also face charges. It published 18 stories alleging misconduct by Zoomlion, of which 14 had Chen's byline. Zhou said that despite the apology, the consequences for the paper will depend on whether the editors knew those reports were false and whether they were bribed as well.

The identity of the person or people who bribed Chen remains a mystery. The CCTV report did not mention who bribed Chen, however, one of the shots in the report lingered on a printout of Chen's testimony to police, which mentioned the Sany Group, a prime competitor of Zoomlion, as well as the names of two journalists.

The Sany Group and a PR institute at the center of the storm, Blue Focus, have both denied involvement. Neither the Changsha police nor the New Express were available to comment on the identity of the briber, but if caught, the sentence will depend on the bribes offered, Wang said, pointing out that previous similar bribery cases had resulted in three to 10 years in jail.

"The case is still under investigation, in fact, they should not have revealed any details, including Chen's confession and his testimony," Zhou said, adding that during the trial it would be important to include evidence regarding people Chen had dealings with.

The All-China Journalists Associate condemned Chen's behavior on Saturday, and said it served as a warning for other media.

Media on trial

"Chen's case, along with the improper investigation process, could have devastating results for the credibility and the future of traditional media," Wang Tianding, dean of the School of Journalism and Communication at Xi'an International Studies University, told the Global Times.

Media in China face multiple pressures, including a changing media landscape, rampant corruption, fierce competition and low wages. One easy solution is to take bribes. A financial journalist with a Beijing-based newspaper told the Global Times, on condition of anonymity, that it is not rare for companies to pay journalists "traffic fees," as they called, to ensure they write positive reports.

Sometimes, however, the bribes have much darker consequences. In 2009, five reporters were imprisoned for taking hush money from a coal mine in Shanxi Province to cover up a mine accident. Earlier that year in the same province, reporters published false reports after a local blood donation station refused to give in to blackmail.

Wang Tianding said that journalists often focus on their short-term benefit, because there are few mature mechanisms to develop their career, enter or exit the industry.

There are few laws and regulations specifically relating to journalism ethics in China. The latest version of China's journalists' code of ethics was released in 2009, but there are no punishment measures for journalists who do not follow it.