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Chinese financier of 'Ip Man 3' denies role in any box-office fraud

With allegations of box-office fraud swirling around “Ip Man 3,” the film’s Chinese financier issued a strongly worded defense Wednesday, saying that unscrupulous cinemas and online ticket-sellers were behind any fake sales, and that the company was cooperating fully with government investigators. 

Shanghai Kuailu Investment Group, run by mogul Shi Jianxiang, said the Donnie Yen-Mike Tyson martial arts film -- released Friday in mainland China -- was a “great film” with no need to artificially inflate its box-office receipts. “Some competitors and criminals are fabricating facts to blackmail Shanghai Kuailu group and other companies,” Kuailu said in its statement, protesting that “widespread rumors and defamation have greatly harmed us, a healthy private company.”

Kuailu is a large private enterprise that was formed out of four old state-run enterprises, including a wire and cable manufacturer, in the 1990s. Shi, 52, who ranks No. 746 on the Hurun Report’s 2015 China Rich List, with an estimated fortune of $780 million, has in recent years branched out into film financing and distribution. With substantial financial resources, Kuailu said, there would be no need for the company to hype the box-office results of “Ip Man 3.”  

The movie supposedly took in $72.3 million in its first three days in theaters, even though early March is typically a slow movie-going period. By comparison, Disney’s “Zootopia,” which also opened Friday, earned about one-third as much. Movie fans reported strange goings-on with online ticketing services, which showed unusually large numbers of “Ip Man 3” screenings sold out, and ticket prices as high as $31 (the average ticket price in China is around $5). Some cinemas indicated that they were showing the movie to full houses every 10 minutes. 

Officials with the State Administration of Press, Publications, Radio, Film and Television on Monday launched an investigation into four online ticket sellers to determine whether sales figures were manipulated and hyped. Industry-watchers say the backers of “Ip Man 3” may have sought to inflate the results to boost their company’s stock price.

Two weeks ago, Shi became chairman of a Hong Kong-listed company, Shifang, that owns rights to theatrical earnings from the movie.

Shares in Shifang, which were trading at about 5 U.S. cents back in October, began rising sharply at the end of 2015, and on Friday, when “Ip Man 3” landed in mainland cinemas, Shifang’s stock price closed at a 52-week high of about 48 cents. Since then, shares have dropped by about half.

In a statement to the Hong Kong stock exchange late Tuesday, Shifang’s chief executive noted the “unusual price and trading volume” of shares on Monday and Tuesday. The company said it was “only an investor in the film rights of the movie and it is not participating in any distribution or release activities of the movie in [mainland China.] The Company reserves its right to take legal action against those media for serious misrepresentations they have made.”

Though Shifang is not technically the film's distributor, the two have close links: In addition to serving as chairman of Shifang, Shi also serves as chairman of the film’s distributor, Beijing Max Screen.

Kuailu’s statement said that Shi, who is well connected in Shanghai and serves as a member of a local government advisory body, was “an ordinary private enterprise entrepreneur who does not need to start an undertaking through counterfeiting.”

The company complained that media reports about the box-office issues were "totally inaccurate" and concocted by entities whose "goal is to let 'Ip man 3' and Shanghai Kuailu Investment Group die and to rip off a layer of the skin of Mr. Shi Jianxiang, the chairman of the group." 

The company emphasized its connections with the government and the Communist Party, noting that it had “cooperated with almost 100 state-owned and private-owned companies” and has been “growing under the support of the country and the Party.”

In an interview last summer in Beijing, Shi said Chinese people had “benefitted a lot from China’s opening and reform” and talked at length about his next project, “The Bombing,” a World War II-era film starring Bruce Willis and centering on Japan’s bombing of the city of Chongqing. “I want to convey a message of the Chinese people’s unbreakable spirit during disaster,” he said.

In its statement Wednesday, Kuailu struck a patriotic tone, saying that “box office is not the goal of Kuailu group; Kuailu is not investing in a film, but wants to express our emotions toward the country. Kuailu is not only investing in a film, but also to send a message across. Once China is strong, Chinese films will be strong.”

Nicole Liu in The Times' Beijing bureau contributed to this report.

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