Stocks fall as TV, film studios to be probed
Shares of China's media companies slumped on Monday as a result of the Chinese tax authority's probe of tax evasion within the film and television industry.
An index of major media firms dropped 1.3 percent to a near four-year low on Monday. Huayi Brothers Media Corp, Zhejiang Talent Television and Film Co Ltd and Spearhead Integrated Marketing Communication Group dropped by the daily limit of 10 percent. Huawei Culture Co Ltd fell by 8.78 percent and Ciwen Media Co Ltd by 6.05 percent.
"It's understandable that actors can earn high salaries, but they should observe the law to pay taxes, or the punishment can be serious," said Li Shuguang, a law professor at China University of Political Science and Law. "Many Chinese film and TV producers are too dependent on famous actors and directors, which is a big risk for their business development and capital market performance."
