BEIJING (AP) — China's film authorities have suspended the license of a distributor that inflated box office figures for Hong Kong martial arts movie "Ip Man 3," according to state media.
The third instalment of the franchise starring Donnie Yen opened in mainland China on March 4 and soon attracted allegations of fraud after it reportedly earned more than 500 million yuan ($77 million) in just four days.
The movie's distributor, Dayinmu, which is also known as Beijing Max Screen, admitted to having bought 56 million yuan's ($9 million's) worth of tickets, the official Xinhua News Agency reported Saturday.
"The conspirators fabricated more than 7,600 screenings of the film that they claimed generated 32 million yuan ($5 million) in ticket sales," Xinhua added. It cited China's film bureau under the broadcasting regulator.
"These kinds of issues could be considered inevitable in a young industry, but box office fraud has become so serious that it is already harming Chinese cinema," Zhang Hongsen, head of the film bureau, was quoted as saying.
The bureau ordered the company to suspend distribution for a month while it "rectifies all malpractices" and gave formal warnings to three electronic ticket-selling groups involved in the fraud, as well as 73 cinemas, Xinhua said.
No phone number was listed for Dayinmu, and it had no immediate statement on its official microblog.
Chinese cinemas and distributors have been accused of faking ticket sales in the past, for example by buying up tickets or counting some of the earnings of one film as those of another. While a distributor will have to fork out money to buy thousands of cinema tickets, the bulk-buying may boost the movie's profile enough to become a talking-point and attract a bigger audience.
The producers of China's briefly highest-grossing movie, a live action and animated fantasy "Monster Hunt," admitted last year to buying tickets worth 40 million yuan ($6 million), which it said was for free screenings for senior citizens and others.
After the release of "Ip Man 3," which also stars former boxer Mike Tyson, state media reports soon alleged that its distributor had bought discount tickets in bulk from various cinema chains, who then scheduled "ghost screenings" after midnight at expensive rates.
China's film market has grown fast in recent years to become the world's second largest, after the United States.
Dozens of cinemas received punishments including warnings, removal of funding and suspensions for box office fraud last year, Xinhua said.
In January, the regulator, the State Administration of Press, Publication, Radio, Film and Television said it was developing an app to help movie goers report fake tickets as part of a crackdown against box office fraud.