Chinese news outlets and journalists were once again caught in the spotlight after a prominent news website allegedly extorted money from companies for positive coverage.

Eight people from 21cbh.com, including the editor-in-chief, journalists, marketing staff and public relations chiefs, were detained, the Shanghai Municipal Public Security Office said on September 4.

As a result, parent-affiliate Nanfang Daily Media Group kicked off an investigation into the website, while a Guangdong provincial media watchdog launched an independent probe.

The website is run by Guangdong-based 21st Century Media, which claims to be the country's largest professional financial and business media operator.

The company's publications include 21st Century Business Herald, Money Week and 21st Century Business Review. On Friday, several Money Week employees were also detained as part of a police investigation, the Xinhua News Agency reported.

The case sparked speculations as what allowed the alleged extortions to occur and how to prevent future such scandals from occurring in Chinese media.

Not fit to print

Business news website 21cbh.com and two public relations firms collaborated to extort money from companies in return for favorable coverage and withholding negative news reports on the site, according to police.

If companies refused, the website would purposely publish negative or malicious information about the companies.

Those accused include Liu Dong, president of 21cbh.com, Zhou Bin, the website's editor-in-chief, and several reporters and employees of its marketing department, as well as heads of two PR firms. Together, they have extorted money from more than 100 companies since November 2013, said police.

The list of victims covers many listed companies and famous enterprises from Beijing, Shanghai and Guangdong that are planning to go public, restructuring or making a business transition.

Confessions of the suspects show "too many companies" were victims, but only a few reported it to police.

Having identified these companies as particularly susceptible to media coverage, the suspects targeted them in the name of news reporting. After the companies handed over "huge payments," 21cbh.com released positive stories with exaggerated content about them, police said.

For companies that declined the suspects' solicitation, 21cbh.com published "malicious attacks" on them or the suspects demanded money to ensure the negative stories would never be published.

Advertise or pay the price

The journalists are also suspected of helping rebut or conceal negative reports on companies that paid up.

Zhou used to target those companies that had not "established collaborative relations" with 21cbh.com and direct journalists to release negative news reports about them on the site.

When the companies involved came to 21cbh.com themselves or through a PR firm, the website would charge 200,000 to 300,000 yuan ($32,500) in the form of advertising contracts, in exchange for deleting the negative reports from the site, Zhou said.

These companies were forced to pay in order to "make concessions to avoid trouble," said Liu Dong.

Negative news reports harm a company's image and hinder its effort to go public, as China Securities Regulatory Commission would investigate the company or even revoke its listed qualification, Liu said.

Wang Zhuoming, another suspect and reporter of the website, admitted, "Using negative news reports to extort companies is a hidden rule, and it's a collective action."

They are also under pressures from their parent firm, 21st Century Media, who requires the website to sign advertising contracts with 70 to 75 percent of the newly-listed companies annually, said Liu, who also demanded his subordinates to "maximize interests."

He also asked reporters not to cover negative news on the companies that had signed advertising contracts with the website. However, some of the companies were still forced to increase advertising payment after negative news about the companies was again deliberately disclosed.

Police said as of 2010, 21cbh.com signed "advertising contracts" with more than 100 companies annually, with values about hundreds of millions of yuan.

A PR firm based in Shanghai, Roya Investment Services Limited, and another based in the southern metropolis of Shenzhen made huge profits as intermediator between 21cbh.com and target companies.

Bad news crews

It is not the first time that the country's media outlet was caught in blackmailing scandals and carrying paid news.

In a high-profile case in October 2013, Chen Yongzhou, a reporter from Guangzhou-based New Express, was arrested on suspicion of damaging enterprises' reputation with false negative reports.

Even the suspects in the 21cbh.com cases admitted that concealing negative news can mislead readers, disturb market order and dampen investors' confidence.

Tao Kai, the suspect and executive director of Roya Investment Services Limited, admitted his actions damaged the media sector and professional ethics of journalism.

Chinese authorities have been stepping up a crackdown on extortion in the media and paid-for news. However, many questioned the effectiveness of those measures due to the recent cases about the corrupt journalists.

Experts called for further legislation to better regulate the industry to clarify the journalists' rights and duties. There are few laws and regulations specifically relating to journalism ethics in China. The latest version of China's journalists' code of ethics was released in 2009, but there are no punishment measures for journalists who do not follow it.

"Apart from establishing a specific media law, Chinese media can also learn from their Western counterparts and strengthen self-regulation within the media," Chang Jiang, a lecturer at Renmin University of China, told CCTV on Thursday.