Caixin
Jan 04, 2012 07:44 PM

Da Vinci Says CCTV Reporter Blackmailed Company

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(Beijing) – Luxury furniture retailer Da Vinci said a CCTV reporter extorted money in exchange for the silencing of false reports over the veracity of the company's product labeling.

In an interview with Caixin, the company said it wired 1 million yuan to an account in Hong Kong. Da Vinci believes the money will finally go to CCTV reporter Li Wenxue.

Da Vinci supplied audio recordings of discussions with Li and an intermediary used to broker the deal.

In two editions of the televised Weekly Quality Report program, on July 10 and July 17, a CCTV report said the Singaporean company exported Chinese-made furniture pieces to Italy and then shipped them back to China under premium Italian brands.

Da Vinci maintains that the manufacturing origin of its products is correct for Italian-made furniture.

On August 31, the Shanghai Administration of Industry and Commerce released the results of its investigation into CCTV's allegations of fraud over Da Vinci. The investigation cleared Da Vinci of any wrongdoing on its Italian product labeling.

However, Da Vinci continued to battle the accusations in media reports. The company claims sales revenue slumped by 86 percent year-on-year in the four months to October.

In April, Tom Cappelletti, company president of luxury furniture-maker Cappelletti, recorded a 100-minute video interview by CCTV reporter Zhu Feng. During the interview, which went unaired, Cappelletti firmly denied that Da Vinci was engaged in fraudulent labeling. The footage then shows a surprised Zhu making a phone call to a reporter in Beijing asking why they are working on a story based on unconfirmed accusations.

Da Vinci representatives say they did not carefully review the contents of the video until August.

After paying hefty public relations fees to a broker, finally, on July 19, Da Vinci general manager Pan Zhuangxiuhua met Li, who said he still held more video clips related to the investigation on Da Vinci. According to Pan, Li said he could either make another follow-up report or not.

After the meeting, the broker asked Pan to pay Li 1 million yuan to stop any further negative reports by CCTV.

On July 25, Pan remitted the money to a Hong Kong account provided by the broker.

Da Vinci filed reports with Beijing police and said it is currently asking Chinese press regulators and CCTV's party disciplinary committee to address the issue.

The full English report will be available online soon.

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