(Yicai Global) June 15 -- Recent malicious rumors some we media have spread online have prompted Huayi Brothers Media to file legal proceedings to hold to account those responsible to protect its rights and interests, it declared on its official Twitter-like Weibo account yesterday. Its statement failed to prop up its share [SHE:300027] price, however; it fell nearly five percent to close at CNY6.57 (USD1) yesterday in a five-year low that pared its market value to CNY18 billion.

The company slammed a slew of reports by various online we media since June 6 as false and fabricated libels, which have seriously impaired the legitimate rights and interests of the firm and its shareholders, and misled and even panicked the market.

The company demanded in a solemn declaration via its lawyers on June 12 that the we media that have deliberately contrived and spread these false facts delete their unlawful content and cease disseminating the rumors. These media have thus far taken no such action, however.

Their claims led with lurid banner headlines such as, 'Huayi Brothers Media Suddenly Pledges Almost All of Its Shares, Not the End of Story' and 'Breaking News! Huayi Brothers Media Suddenly Pledges Almost All Equity in Crazy Cash-Out!' Wang Zhongjun and Wang Zhonglei, the male siblings in charge of Huayi Brothers Media, did indeed pledge sheaves of shares to take out loans on June 6, as Yicai Global reported at the time.

The firm will sue the China Bond and Financial Gossip Girl Channel accounts on popular messaging and payment app WeChat and the Financial Gossip Girl and Things on the Internet accounts, and other we media sources fabricating and disseminating the rumors, it said.

Formed in Beijing in 1994 by the Wang brothers, the company owns a film studio, TV production facilities, a talent agency, record label and cinemas. Variety magazine once called it "China's largest private sector film conglomerate." It was the seventh-largest film distributor in China, with 2.26% of the market in 2014, public data shows

The firm has always complied with state laws and regulations and claims of it engaging in tax evasion and money laundering do not accord with facts, it stated June 13.

Editor: Ben Armour