Shanghai police have detained a man suspected of fabricating online rumors that a female executive at State-owned oil giant Sinopec accepted sexual favors as a bribe from a US supplier, and that the supplier subsequently blackmailed her.
Fu Xuesheng, 47, president of Shanghai LabInfo Technologies Ltd, also faces an allegation of making up a rumor that a police chief accepted more than 2 billion yuan ($327 million) in bribes and murdered an entrepreneur.
Police said Fu made up the rumors to vent his anger at Sinopec and a company involved in the rumor involving the police chief.
Fu's arrest came amid a nationwide clampdown on online rumors.
Since last week, police in Beijing have closed a company suspected of fabricating and spreading fake information online, especially involving celebrities, and placed two of the company's executives, Qin Zhihui and Yang Xiuyu, in criminal detention.
On Sunday, prosecutors in Jiangsu province approved the arrest of Zhou Lubao on charges of extortion linked to spreading Internet-based rumors.
In Shanxi province, 23 people had been arrested by Aug 15 with 27 websites shut down during a crackdown on illegal online activity that has taken place since June 25, the police said. The individuals and websites are suspected of releasing false information online, using the Internet to blackmail others, or engaging in Internet-based fraud.
But unlike some others who spread false information online to seek economic gains, police said that Fu made up rumors for revenge.
Fu made up the Sinopec story because he failed in a bid for a Sinopec project at the end of last year, the Ministry of Public Security said in a statement.
Fu released an online post last year claiming that US high-tech company Agilent Technologies bribed the Sinopec official, identified only by her surname, Zhang, with two male prostitutes at an exclusive club in Beijing.
Fu claimed that the US company won the contract to provide machinery for a petrochemical plant in Wuhan after they used photos to blackmail Zhang.
"To make it sensational, Fu hired online posters with thousands of yuan to forward the post and make it top news," the ministry added.
It also said that the post was widely spread online with 110,000 results created on search engine baidu.com. It severely damaged Sinopec's reputation and harmed the official - identified as Zhang Qin - and her family.
Police said Fu had profound IT knowledge and made the investigation difficult: He rented an office in the Lujiazui area in Shanghai and surfed foreign websites there. He initially released the false information on overseas forums and then forwarded it to domestic ones.
Fu also used special software to delete the traces after browsing related websites, police said.
To prevent online rumors, those responsible for them should be punished severely, said Liu Deliang, a law professor at Beijing Normal University.
Zhang told CCTV that she has continued going to work despite the great pressure since the rumor.
"I suppress myself and never shed a tear. But I was always weeping in my heart", she said.
Zhang said that now that the rumor has been discredited, she can return to her normal work and life.