Hollywood-China Probe: Is Xilai Scandal Related To Movie Biz?

Hollywood China SECUPDATE: Both Warner Bros (at the Time Warner level) and Universal issued “declining to comment” statements to Deadline about whether they’ve received SEC letters of inquiry about their China dealings. Interesting.

Sounds like U.S. regulators are investigating major U.S. movie studio dealings with China government officials. The implication is an alleged bribery scandal following the China Film Group easing controls over foreign films in February. And the timing couldn’t be worse: right after DreamWorks and Disney announced big new deals there. And all the studios just made blockbuster box office grosses there on new films. And just as the summer tentpoles are about to debut there as well. Reuters is reporting:

The SEC has sent letters of inquiry to at least five movie studios in the past two months, including News Corp’s 20th Century Fox, Disney, and DreamWorks Animation, a person familiar with the matter said. The letters ask for information about potential inappropriate payments and how the companies dealt with certain government officials in China, said the person, who was not authorized to speak publicly about the letters…. The inquiry reflects stepped-up scrutiny from the SEC and Justice Department into potential violations of the Foreign Corrupt Practices Act, a 1970s law that bars U.S. companies and individuals from paying bribes to officials of foreign governments… Besides DreamWorks Animation’s plan to build a production studio in Shanghai, Disney announced last week that the next “Iron Man” film will be co-produced in China under a joint agreement between Disney, its Marvel Studios arm and China’s DMG Entertainment. Disney had also announced earlier this month that it would work with China’s Ministry of Culture and Tencent Holdings to promote the animation industry in China.