Widening corruption probe in China’s media industry casts spotlight on global advertising practices
A widening media rebate scandal in China has led to arrests at major ad agencies, exposing deep-rooted transparency issues in global media buying practices.
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A growing corruption scandal involving media rebates in China’s advertising industry is ensnaring executives at some of the world’s largest agency holding groups, raising broader concerns about opacity and accountability in global media buying practices.
The investigation, which began in late 2023 with a whistleblower complaint at GroupM, now operating under the WPP Media umbrella, has since expanded across the media landscape. Authorities in Shanghai have detained or questioned more than 30 individuals linked to GroupM, Dentsu, and other vendors, according to Campaign Asia-Pacific.
The most recent developments include the resignation and subsequent detention of Tommy Li, Chief Executive of Dentsu Media China. Dentsu confirmed Li is in police custody following an internal review, though it emphasized that no clients were implicated and that no other employees were currently under investigation.
Separately, Julep Lin, former Chief Client Officer of Wavemaker China, was arrested last week. Lin had departed GroupM in 2024 and was freelancing with Havas Media at the time of his apprehension.
Meanwhile, Chen Yuan, a former member of GroupM’s investment team, is set to stand trial on June 24. His case follows earlier legal proceedings against three other GroupM executives accused of misappropriating rebate funds for personal benefit.
At the center of the probe is the alleged diversion of media rebates, known in industry terms as “cash AVBs” (agency volume bonuses), which, under most contracts, are meant to be returned to advertisers. Instead, investigators say the funds were funneled through intermediaries and retained by agency executives, in what experts are calling a breach of fiduciary duty and a fundamental failure of governance.
In response to the investigation, WPP and Dentsu have launched internal audits and instituted compliance measures. Yet experts warn that the extent of the misconduct suggests more systemic issues within the media trading ecosystem.
Media rebates, long a source of contention between advertisers and agencies, remain one of the least transparent components of the advertising business. Critics argue that the lack of oversight and third-party validation creates opportunities for unethical behavior, especially in high-growth markets where regulatory scrutiny is often weaker.
