The former partner of Zheng Shuang, who has run afoul of Chinese regulators, was fined more than 32 million yuan (US$5 million) on Monday for helping the disgraced actress evade taxes.
The Shanghai tax authority said it was fining Zhang Heng because he was responsible for approving and enforcing Zheng's dual-priced contracts, which allowed her to avoid 43 million yuan (US$6.7 million) in taxes.
Zhang, who was in a long-term relationship with Zheng, was a source who revealed the tax-dodging scheme to authorities.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
"Considering that Zhang was one of the whistle-blowers in Zheng's tax evasion case, he was fined three-quarters the amount of taxes that were evaded, totalling 32.27 million yuan," the Shanghai Municipal Tax Service said in a statement.
Zheng was fined 299 million yuan (US$46 million) for her role in the scheme.
In January 2021, Zhang also accused his former partner of abandoning two children who were born to surrogate mothers in the US. The incident did more to tarnish her public reputation than the tax evasion case.
The tax authority found that Zhang, who was Zheng's agent at the time, had assisted her in late 2018 to sign one contract that paid her 160 million yuan (US$25 million), while the contract submitted to the tax authorities claimed her salary was 48 million yuan (US$7.5 million).
According to the tax service, Zhang helped Zheng set up a new company under her name to receive the concealed salary.
The fine was the latest development in a months-long saga in the fallout of the ex-lovers and business partners.
In the aftermath of the surrogacy and tax scandals, Zheng has been banned from the entertainment industry and her existence on the Chinese internet has been nearly completely censored.
Before that, the former couple were already involved in a legal dispute when Zheng sued Zhang in November 2019 to demand the repayment of a 20 million yuan (US$3.1 million) debt she claimed he owed her after their break-up.
Zhang lost the case in March this year but, in another case in May, he won custody of their children born to the surrogates.
Shanghai's tax authority warned in Monday's statement that it would intensify the crackdown on tax law violations by celebrities, webcasters, and their agents under the instruction of the top leadership.
"Once we find an agent has helped celebrities or webcasters design and enforce tax evasion plans, we will launch inspections and impose strict punishment on both parties," it said.
The statement comes amid the backdrop of a months-long governmentwide crackdown on celebrities who were perceived to be behaving badly, either by flagrantly breaking the law or by breaking social taboos.
Once one of China's most popular male celebrities, Kris Wu was charged with rape after multiple women accused him of date rape.
Zheng's case has drawn comparison to the tax evasion charges against superstar actress Fan Bingbing, who was fined 883 million yuan (US$137.8 million) in 2018 in fines and unpaid taxes after she failed to pay 255 million yuan (US$39.8 million) in dues.
Fan disappeared from the public eye for four months, leading to widespread rumours, before she was charged with tax fraud.
More from South China Morning Post:
- Chinese government fines surrogacy controversy actress Zheng Shuang US$46.1 million for tax evasion
- Zheng Shuang pay scandal shows China's entertainment industry needs better regulation
- Who is Zheng Shuang, the controversial Chinese actress dropped by Prada after accusations of greed, tax evasion and 'abandoning' her surrogate children in the US?
- Actress Zheng Shuang pay scandal reignites debate over massive fees received by Chinese influencers in a country where many struggle