Speculation swirls around PR agency Edelman link after CCTV anchorman is detained in China

People's Daily tweet today

People’s Daily tweet

A conflict of interest from an equity stake he held in a PR agency could have led to the detainment of a high-profile TV presenter in China, speculation emerged earlier today.

Chinese state media reported yesterday that CCTV anchor Rui Chenggang had been apprehended by the authorities on Friday, although reasons why were initially unclear.

However, a tweet (above) from Chinese newspaper People’s Daily suggested that Rui was being detained because he held shares in a Chinese subsidiary of US-based PR agency Edelman while working for CCTV.

Rui Chenggang

Rui Chenggang, pic: CCTV

Together with Steven Cao – now the group CEO of Daniel J. Edelman China Group – Rui started the PR agency Pegasus Communications in 2002. A majority stake in the company was acquired by Edelman five years later.

That stake had grown to 84 per cent by 2009, but Rui and Cao retained a minority shareholding.

According to Tencent, services were provided to CCTV by Pegasus Communications in that same year – Pegasus found a studio for Rui’s show, Economic News, for the World Economic Forum in Davos, the New York Times is reporting.

Edelman, in a statement, said that when the acquisition was first made, Rui was a “minority, inactive investor”.

The firm added that “it was our expectation that Mr. Rui was to be divested of his minority shares immediately after the acquisition.”

Rui’s investment in the Edelman group came to an end in 2010, when Steven Cao bought Rui’s shares. The transaction, according to the PR firm, “took longer than expected.”

To the point of its involvement in the World Economic Forum, Pegasus was “engaged by corporate sponsors involved in underwriting CCTV’s presence at Davos,” Edelman said.

The statement in full from Edelman, shared with Mumbrella:

In 2007, Edelman acquired a majority stake in Pegasus, a preeminent Chinese PR firm, to expand our capabilities in China. Edelman acquired percentage stakes from Mr. Cao Gang (Steven Cao) 28.86%, Mr. Rui Chenggang 28.08% and Mr. Hong Xing (Howard Hong) 21.06%.

Following that initial transaction, the shareholding of Pegasus was 78% Edelman, 8.14% Mr. Cao, 7.92% Mr. Rui and 5.94% Mr. Hong. Mssrs. Cao and Hong were owner/managers at the time. Mr. Rui was a minority, non-active investor at the time of the acquisition.

It was our expectation that Mr. Rui was to be divested of his minority shares immediately after the acquisition. Mr. Cao purchased his shares in 2010 resulting in a new shareholding structure of 83.94% for Edelman and 16.06% for Mr. Cao. The transaction, which took longer than expected, was completed in 2010 ending Mr. Rui’s investment in Pegasus. Upon Mr. Hong’s departure from Pegasus, Edelman acquired his remaining shares.

On a separate matter as it relates to the World Economic Forum in 2009 and 2010, Pegasus was engaged by corporate sponsors involved in underwriting CCTV’s presence at Davos.

We are taking this matter very seriously and will continue to provide updates as warranted.


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