Two bloggers were sentenced to jail in the Inner Mongolia autonomous region on Wednesday for posting fictitious stories about the head of a giant Chinese dairy company, Yili Group.
Zou Guangxiang and Liu Chengkun were accused of defaming Pan Gang, chairman of Inner Mongolia Yili Industrial Group, in a series of WeChat posts beginning on March 24.
Zou was sentenced by the Huimin District People's Court in Hohhot to one year in prison with a one-and-a-half year reprieve; Liu was sentenced to eight months in prison for defamation and causing a disturbance, according to a statement on the court's website.
Both Zou and Liu will appeal the verdict, the statement said.
Liu is accused of posting three fictitious articles on his WeChat account, Tianlu Caijing, suggesting that Pan had been detained by police for investigation after returning from a trip to the United States.
Zou posted on March 26 that Pan had "disappeared" after returning from the US, despite being told earlier by Yili Group that the information was false.
Zou's articles received 5.74 million views, while Liu's were read 10,993 times.
Yili Group issued a statement on its website on Wednesday accusing its former chairman Zheng Junhuai of having a secret meeting with Liu to spread the rumors about its current chairman Pan.
In December 2004, Zheng was detained by Hohhot prosecutors. One year later he was put in jail with a six-year sentence for embezzling 16.5 million yuan ($2.38 million). Zheng was released in 2008 after the sentence was reduced for good behavior.
According to Yili, Zheng embezzled more than 240 million yuan.
The company has submitted dozens of documents said to contain evidence of Zheng's embezzlement to procuratorial and supervisory authorities at various levels since 2004, but the protection of a former national-level official and several ministerial-level officials has shielded him from being prosecuted for the embezzlement, the statement said, without naming anyone.
The "protectors" also helped him to reduce his sentence from six years to three and a half years, it said.
When Zheng was released from jail in 2008, he began using the influence of his protectors to ask Yili for the money he embezzled before he went to jail, according to the statement.
The company denied his request, so Zheng hired bloggers to concoct rumors about the leaders of Yili and their families, it said.
"We were bullied by Zheng and his protectors for too long and became miserable and mentally and physically exhausted. We have no choice but to disclose the truth to the public," the company said.
"Everything in the statement is true and we hope prosecutors will hold Zheng and his protectors responsible as soon as possible."