According to Taiwan News, President Xi Jinping has announced plans to investigate nearly 200 other celebrities who might be entangled in tax fraud, including Taiwanese celebrities like Ethan Ruan, Wallace Huo and Mark Chao.
By June Low |
One of the most influential actresses in Mainland China, Fan Bingbing is also the highest-paid celebrity in China over the past four years, according to Forbes. Having earned approximately 300 million yuan (S$62.5 million) in 2017, she has also acted in big Hollywood films like “X-Men: Days of Future Past” ( 2014 ), and was asked to serve on the 70th Cannes Film Festival jury in the same year. She is also regarded as a style icon, having graced many red carpets with glitzy outfits and flashy gowns.
The accusations were brought about by former TV host Cui Yongyuan. On 28 May 2018, Cui posted on his Weibo account some pictures of what seemed to be photocopies of Fan’s employment contract. They were posted with the caption, “Stop acting, you’re terrible at it!”
These documents revealed that Fan was to earn 10 million yuan (S$S2 million) from a four-day film shoot, and several other unusual terms and conditions that drew Chinese netizens’ interest.
For example, she would be given a daily allowance of 1,500 yuan (S$S300 ) for food, her personal makeup artist would command a monthly fee of 80,000 yuan (S$16,000 ), and that she had the right to amend the script or refuse hairstylists.
Fan’s meteoric rise ended abruptly when she was placed under house arrest by Chinese authorities in late July.
This employment contract was for Fan’s work in an upcoming film, Shou Ji 2 (Cell Phone 2 ).
However, the real blow came when Cui posted yet again on May 29, stating that Fan in fact had two contracts for this job.
Cui suggested that the 10 million yuan-contract was actually the smaller of two contracts, and posted up the bigger contract worth 50 million yuan (S$10 million). He questioned why two contracts were needed, especially since she had so many demands and requests.
In China, these are called ‘yin-yang contracts’, a common but illegal way to avoid paying high taxes. Two contracts are produced, one with the real value and one with an understated value. The contract with the understated value is handed in to the authorities to pay fewer taxes.
In this case, Cui accused Fan of handing in the 10 million yuan-contract to the authorities to evade high taxes.
Personal Vendetta Between Cui and Fan?
Cui and Fan’s relationship extends as far back as 2003. Fifteen years ago, director Feng Xiao Gang released a film called “Shou Ji” (Cell Phone), which became a hit in China and propelled Fan to fame.
It was a dark comedy that told the story of a TV show host (played by Ge You), whose wife caught him having an affair with a young, attractive woman, Wu Yue (played by Fan Bingbing). His wife discovered the affair by looking through his cell phone.
However, there were many rumours that “Shou Ji” was based on Cui’s life and character, which angered him deeply, as it accused Cui of being unfaithful to his wife.
At the time, he claimed that it caused enormous distress to his family, and he never forgave director Feng Xiao Gang.
The incident was a catalyst for Cui’s temporary exit from showbiz in 2002. The year before in 2001, Cui was diagnosed with clinical depression, when he was running a talk show called “Tell It Like It Is”. However, he ended the show abruptly in 2002 as his depression got worse after the incident. He only came back into showbiz in 2006 after a long battle with depression.
Could Fan’s arrest symbolise a crackdown on the key figures backing the entertainment industry, and an attack on the Jiang faction?
Although Fan was involved in the first movie, Cui did not articulate any views of her back then. However, when Fan announced on Weibo that she was going to act in “Shou Ji 2”, Cui leaked the contracts soon after.
In a TV interview, Cui said, “I was furious when Fan Bingbing announced on Weibo that she was going to play Wu Yue again. I thought, I’ve spared you for all these years, and you’re not even remorseful? You’re a woman, you’re probably concerned about your reputation too, can you still keep your conscience when you’ve slandered others?”
Cui has always been known for his straight-talking and honest style, and his whistleblowing exploits have been praised by netizens. He is also a known critic of the Chinese Communist Party (CCP), and has advocated for democracy and freedom in China.
Sign of Bigger Tensions in the Political Arena
All this may just sound like celebrity gossip, but there may be greater implications on the political landscape in China.
The entertainment circle in China has strong ties to the government, and with Fan as one of the most powerful players among Chinese celebrities, it is no wonder that she has strong support from government officials and other associated people. She is also the girlfriend of actor Li Chen, who was born into a military family.
When news of her arrest was released on Chinese media, the reports were erased soon after from media websites.
Fan also holds shares in two of China’s largest entertainment companies, Huayi Brothers and Zhejiang Talent Film and Co. When news of her tax evasion spread, stocks began to plunge for these companies, due to investor concerns that more tax evasion exposés of other actors would emerge.
Share prices of Huayi Brothers fell 10.02 percent on the Shenzhen Stock Exchange, obliterating about 2.28 billion yuan (S$457 million) of equity value, according to Chinese news portal Sohu.
Interestingly, Huayi Brothers has very close ties to the military, as the company’s founders—brothers Wang Zhongjun and Wang Zhonglei—were born into a military family. Moreover, the company has mortgaged over 90 percent of its shares, in exchange for loans from Chinese investment bank CITIC Securities.
CITIC Securities’ Chairman, Wang Jun, is also the Chairman of the Board of Poly Technologies in the People’s Republic of China, which deals in arms-trading with the People’s Liberation Army. He is a close friend of Jiang Zemin.
The Entertainment Circle’s Close Ties With the Jiang Faction
Huayi Brothers is also backed by three other key figures: Dong Ping, Zeng Qinghuai and Albert Yeung, who are dubbed the “Entertainment Tycoon Iron Triangle” by Hong Kong media.
Zeng Qinghuai is the brother of Zeng Qinghong, one of Jiang Zemin’s closest allies in the Communist Party when he took power in the 1990s. As the chairman of Huanxi Media Group, he frequently acted as artistic consultant for some of Huayi Brothers’ biggest film projects.
In the 90th year of the founding of the CCP in 2011, Dong Ping and Albert Yeung jointly invested in the filming of the movie “Beginning of the Great Revival”, which tells the story of how the CCP was created. Meanwhile, Zeng Qinghuai became the general counsel for the film.
“Aftershock” ( 2010 ), directed by Feng Xiaogang, also had Zeng Qinghuai as the art consultant.
Meanwhile, Dong Ping was instrumental in supporting Huayi Brothers’ during their early years. He was the principal investor in their first three films, “The Emperor and the Assassin” ( 1998 ), “Sorry Baby” ( 1999 ) and “Devils on the Doorstep”( 2000 ).
He is close friends with Xiao Jianhua, a Chinese billionaire who was abducted into China from Canada in 2017 by Chinese security officers. Xiao also had close ties to the Jiang Zemin faction.
Shortly after Xiao was abducted, there was no sign of activity from Dong Ping either, leading many to suspect that he had been arrested as well.
According to Taiwan News, President Xi Jinping has announced plans to investigate nearly 200 other celebrities who might be entangled in tax fraud, including Taiwanese celebrities like Ethan Ruan, Wallace Huo and Mark Chao. The authorities plan to investigate celebrities who earn above 10 million yuan (S$2 million) in annual income.
Could Fan’s arrest symbolise a crackdown on the key figures backing the entertainment industry, and an attack on the Jiang faction?
On the surface, an A-list Chinese celebrity has been arrested for tax evasion. But with so many key players in the entertainment industry getting implicated, one might wonder if Fan is merely a scapegoat in this whole plan. Moreover, this may only be the start of a series of crackdowns in the entertainment industry as more celebrities are exposed for tax fraud, and a deepening of the cracks within the Jiang faction.
