She is the Chinese movie star who inadvertently triggered a boom in sales of Blackmores’ Vitamin E cream when a tube of the Australian-made product fell out of her handbag while being photographed at an event. Another Australian vitamins group Swisse Wellness, which was sold to Chinese interests in 2016, also signed up Fan Bingbing as a brand ambassador last year.
Ms Fan, however, is now at the centre of a taxation scandal which could not only hurt her ability to promote Australian products to tens of millions of social media followers, but has thrown the spotlight on the excesses of China’s movie industry, which is expected to overtake the United States this year in box office sales.
Claims by an outspoken Chinese television host that Ms Fan, one of the country’s best-known movie and television stars, had avoided paying taxes, has triggered an investigation by government authorities and rattled the country’s booming movie industry over fears other stars now face similar probes.
Details of so-called “yin yang contracts” – a practice of issuing multiple contracts where tax authorities are cited a different figure to the actual fee paid – were posted on the country’s Twitter-like social media platform Weibo over the weekend. The allegations by TV host Cui Yongyuan to call out a practice some academics say is rife in the industry have sparked a media storm in China.
Mr Cui alleged Ms Fan was offered 10 million yuan ($2 million) in one contract and a private 50 million yuan ($5 million) contract in another. In another post he said she was paid 60 million yuan for four days work on a new movie, according to local media reports. “Cui’s decision to expose confidential documents and publicly insulting Ms Fan not only breaks business rules but infringes on Fan’s legal rights.” Fan’s studio said in a statement.
Local media said the tax bureau in Wuxi, a city in eastern China’s Jiangsu Province, launched a probe into Ms Fan’s studio. The State Administration of Taxation said in a statement that any illegal activity uncovered would be punished in accordance with the law.
“It might be a single case, or a broad hidden rule in the film and television industry,” Cai Daotong, director of the Law School of Nanjing Normal University, was quoted as saying in the China Daily.
Shares in China’s huge film studio and movie production companies fell on Monday on fears the allegations were part of wider tax evasion which could disrupt the industry. Shares in Huayiu Brothers Media fell by 10 per cent to a five-year low on the Shenzen Exchange. Zhejiang Talent Television and Film Co, in which Ms Fan owns an interest, fell 9 per cent
Ms Fan is the top-paid celebrity according to the Forbes China Celebrity 100 list. She is best known to western audiences for her role in the 2014 X-Men: Days of Future Pastmovie.
Her apparent accidental link to a Blackmores product in 2015 is often cited as an example of the pulling power of China’s brand ambassadors for Australian exporters because of the huge fan base and social media following. At the time, the then-Blackmores chief Christine Holgate said sales of the product “just exploded” following th event.
While that incident was good luck for Blackmores, many Australian companies pay Chinese celebrities a fortune to promote their products. Retired Chinese tennis star Li Na is an official brand ambassador for Blackmores.
Swisse also went on to sign up Fan last year, along with other star ambassadors like Nicole Kidman.
“We are aware of the allegations and wish to state that this situation remains to be hearsay,” a Swisse spokeswoman said on Tuesday.
“Investigations are continuing and as such we politely cannot comment.”
by Michael Smith