SEC-China letter sent to all Hollywood studios
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SEC-China letter sent to all Hollywood studios
A letter from the Securities and Exchange Commission was sent to all six major Hollywood studios and DreamWorks Animation probing potential violations of the Foreign Corrupt Practices Act in their dealings with China, knowledgeable people not authorized to speak publicly confirmed.
In earlier reports, it was not clear how many studios had received the letter.
The fact that all did indicates that the SEC is looking into general industry practices and not the actions of any specific company.
Twentieth Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Walt Disney Studios, Warner Bros., and DreamWorks Animation all regularly export their movies into the fast-growing Chinese market, which generated more than $2 billion in box-office revenue last year.
Additionally, as members of the Motion Picture Assn. of America, the six majors were supporters of trade negotiations that earlier this year led to China allowing more foreign movies into the country on a revenue-sharing basis and increasing the percentage of box office that the American studios could receive.
Sony co-produced its 2010 film "The Karate Kid" with China Film Group, and Disney is producing "Iron Man 3" in partnership with Beijing firm DMG Entertainment.
DreamWorks Animation is building a new studio in Shanghai along with two state-owned firms.
People who have been briefed on the content of the letters said they contain a broad array of questions and don't indicate that the SEC is currently focused on a specific element of studios' dealings with China, be it possibly bribes related to the selection of films for import, producing partnerships, or other interactions.
The letters are in most cases being handled by the legal departments of studios' parent companies: Time Warner Inc. for Warner Bros., for instance, and Viacom Inc. for Paramount Pictures.
-- Ben Fritz
Photo: Chinese film director Feng Xiaogang, center, actress Fan Bingbing and Chinese-U.S. singer Wang Leehom arrive for the opening of the Beijing International Film Festival in Beijing on April 23. Credit: How Hwee Young / European Pressphoto Agency.
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