A state-run Chinese newspaper ran a front-page headline asking police to release one of their journalists who was jailed for criticizing a state-owned construction equipment manufacturer, reports Megha Rajagopalan for Reuters.

Chinese Journalist Chen Jailed For Criticizing State-Owned Firm

Chen was detained by the Changsha police

Chen Yongzhou was detained by the Changsha police for running a number of stories alleging that Zoomlion Heavy Industry Sci & Tch Co Ltd (SHE:000157) had engaged in fraud and defamed competitors. Communist Party leadership has made efforts to cut down on corruption and bribery, but apparently those efforts don’t include encouraging whistleblowers to talk to newspapers.

“When the government is cracking down on freedom of expression and arresting journalists … it seems to cast serious doubt on how serious this anti-corruption drive is,” Maya Wang of Human Rights Watch told Reuters.

Chen is suspected of damaging a business’s reputation

Zoomlion says that it complained to the police about Chen’s stories in order to protect its “legitimate rights,” and alleges that Chen was writing stories planted by rival firm Sany in order to discredit it. Changsa police say that Chen is suspected of damaging a business’s reputation.

“Even though Zoomlion is very strong and pays a lot of taxes in Changsha, we are still of the same class,” the newspaper wrote. “Uncle police, big brother Zoomlion, we beg you, please let Chen Yongzhou go.”

Sany and Zoomlion have been competing for a shrinking market as China’s GDP growth rate drops and construction slows, and some say their rivalry has gotten vicious. Sany has even accused Zoomlion of arranging the kidnapping of an executive’s son, though Zoomlion denies the charges. An employee of Zoomlion Heavy Industry Sci & Tch Co Ltd (SHE:000157) even accused Chen of doing ‘paid journalism’ over the summer, causing the paper to press charges for libel.

Trading on Zoomlion’s stocks was suspended

It’s hard to know what’s really happening with so many accusations being flung about, but jailing journalists is usually a bad sign and none of this looks like the behavior of a company doing well.

Trading on Zoomlion’s stocks was suspended earlier this year after reports came out that it had released falsified sales reports. Although the company’s stock has recovered somewhat since the summer, it is still down to 6.82 HKD after starting the year at 11.98 HKD, compared to the Hong Kong Hang Seng China Enterprises Index, which is down about 5% YTD.