China's film authorities have suspended the license of a distributor that inflated box office figures for the martial arts movie "Ip Man 3."
The third installment of the franchise starring Donnie Yen opened in China's mainland on March 4 and soon attracted allegations of fraud from moviegoers and industry observers after it reportedly earned more than 500 million yuan ($77.3 million) in just four days.
The movie's distributor Dayinmu, or Beijing Max Screen, later admitted to having bought 56 million yuan's worth of tickets.
"The conspirators fabricated more than 7,600 screenings of the film that they claimed generated 32 million yuan in ticket sales," said a statement issued by the film bureau under the State Administration of Press, Publication, Radio, Film and Television.
The bureau ordered Max Screen to suspend distribution for a month while it "rectifies all malpractices" and gave formal warnings to three electronic ticket-selling groups involved in the fraud.
A total of 73 cinemas were also given warnings for their part in the incident. They will be named and shamed on the website of the China Association of Film Distributors and Cinemas.
Max Screen said it had "studied and fully accepted" the punishment. "The company solemnly pledges to learn from the experience and comply with the rules," the LA Times quoted it as saying.
"These kinds of issues could be considered inevitable in a young industry, but box office fraud has become so serious that it is harming Chinese cinema," said Zhang Hongsen, the head of the film bureau.
China's movie industry has been blighted by cinemas and distributors cheating to inflate box office figures, through means such as taking a film's earnings into another's count or claiming ticket sales for screenings far above that auditorium's capacity. Some cinemas have even been known to sell hand-written tickets.
While distributors fork out money to buy thousands of tickets, the bulk-buying may boost the movie's profile enough to become a talking-point and attract a bigger audience. Several cinemas, however, have been accused of attempting to avoid sharing box office earnings.
"A successful screening market is the foundation for our film industry. In China, box office is crucial to the income of film producers," Zhang said, vowing measures to halt such misconduct.
Dozens of cinemas received punishments ranging from warnings to business suspension for box office fraud last year.
Earlier this year, authorities launched a campaign targeting box office misconduct, unlicensed copying and recording of films as well as poor screening quality.
"Filmmaking and screening are two wings of one bird and they have to rely on each other. Only a regulated and healthy market can give birth to quality films," Zhang said.
The producers of China's briefly highest-grossing movie, a live action and animated fantasy "Monster Hunt," admitted last year to buying tickets worth 40 million yuan, which it said was for free screenings for senior citizens and others.
Soon after the release of "Ip Man 3," which also stars former boxer Mike Tyson, media reports said its distributor had bought discount tickets in bulk from various cinema chains, which then scheduled "ghost screenings" after midnight at expensive rates.
In January, the State Administration of Press, Publication, Radio, Film and Television said it was developing an app to help moviegoers to report fake tickets as part of a crackdown against box office fraud.
After earning a record 44 billion yuan in 2015, China's cinemas made history again in February when their monthly takings surpassed those of their counterparts in the U.S..
