Beijing-based film and television investment company United Film Investment recently filed suit against the China Film Group in the Beijing No.1 Intermediate People's Court. United alleges that the China Film Group violated a number of terms of the companies' agreement for the film My Own Swordsman, on which they cooperated, including "severe falsification" of box office profit reports. United is demanding that the China Film Group pay 30% of net revenues for the distribution of My Own Swordsman, plus interest - a sum working out to more than RMB 102 mln.
The China Film Group is currently preparing for its subsidiary company's public listing. An industry analyst speculated that United Film Investment's suit could affect the progress of the IPO.
According to publicly available figures, My Own Swordsman had box office revenues of nearly RMB 220 mln. An industry insider noted that the China Film Group has absolute control of cinemas in the downtown areas of major cities, meaning that My Own Swordsman would have been unlikely to generate such high revenues without the company's participation. In point of fact, the source said, any company partnering with the China Film Group will cede a certain portion of its profits to the company. The China Film Group's influence is felt at every stage of the film production process from production to distribution, making it inadvisable for any players in the film industry to get on the company's bad side.
Hao Yaning, chairman of United Film Investment, said that the China Film Group's monopoly in the domestic film industry has allowed the company to "kill" any domestic film it wants. Renowned producer Zhang Weiping had previously blasted the China Film Group, alleging monopolistic tactics, following the release of A Woman, a Gun, and a Noodle Shop.