A reporter from the New York Times telephoned to interview Han Sanping (pictured), chairman of China Film Group Corporation on April 29 following a Securities and Exchange Commission (SEC) investigation into whether or not Han had been bribed by several large U.S. companies in order to maximize profits.
When asked if he knew anything about the bribery allegations, Han denied all knowledge of the SEC investigation, telling the reporter: "How could I know about it? I haven't even got a clue."
Muted responses to investigation
The last two months have seen letters of inquiry sent to five large film companies, including Twentieth (20th) Century Fox Film Corporation, The Walt Disney Company and DreamWorks Animation. Spokesmen from Sony and Paramount have so far refused to comment on whether or not their companies have had dealings with China Film Group Corporation.
According to as yet unverified reports, China Film Group Corporation earmarked 5 million RMB (US$793,995) as part of its budget for making "The Karate Kid", to guarantee the right to select the producer of its choice. The film's executive producer finally selected Han Sanping, chairman of China Film Group Corporation.
Most film companies' spokesman declined to discuss the SEC investigation and declined to answer questions on the subject of bribery allegations.
The SEC investigation was instigated following a tipoff from a whistleblower. It is currently unclear as to whether or not deals between U.S. film companies and China are still in the pipeline; however Hollywood has been informed that all documents and emails related to dealings with the industry in China will be frozen.
New film policy opens door to more China-U.S. deals
Despite Hollywood's eagerness to capture a share of the lucrative Chinese film market, the China Film Group Corporation still tightly controls all market activity, until recently limiting entry to only 20 foreign films per year. .
This changed following Chinese Vice President Xi Jinping's visit to the U.S., after which an additional 14 IMAX or 3D foreign films per year were allowed entry into the Chinese film market.
Further to this, DreamWorks currently has plans to establish a studio in Shanghai, and last week Walt Disney Company announced plans to co-produce "Iron Man 3" in China with Chinese company DMG Entertainment.
It will be the first China-Hollywood co-production, and total investments will exceed US$1 billion.