Beijing-based Caixin Media on Monday announced that it is taking legal action against a property tycoon for defaming its founder-editor with what it claims are false accusations of corruption.

Caixin, a Chinese media group that provides financial and business news via various periodicals and its website, said on Monday that it has reported businessman Guo Wengui, who it says defamed the media group and its founding editor Hu Shuli, to the police and is taking legal action against Guo for "spreading rumors."

The ongoing feud between Guo, founder of real estate company Beijing Zenith Holdings Co Ltd, and Caixin media started when the media outlet released a report on March 25, detailing Guo's alleged links to several political scandals and controversial business deals in recent years.

The report claimed that Guo was allegedly involved in several political scandals along with several officials including former executive deputy minister of the Ministry of State Security, Ma Jian. With their help, Guo allegedly toppled the former vice mayor of Beijing, Liu Zhihua, and secured a key land development project near the National Stadium in Beijing.

Guo, 49, started his business in Zhengzhou, Henan Province in the 1990s. He later shifted his focus to Beijing in 2002, and set up Beijing Morgan Investment Co and Beijing Zenith Holdings Co.

Caixin quoted sources close to the matter as saying that Guo  caused Liu's downfall by reporting his corruption to the central government and also sending the authorities a sex tape starring Liu and his mistress, after the local official refused to help Guo gain control of the development project.

Liu was investigated for corruption in June 2006. Ma was also investigated over corruption allegations in January.

Ma is believed to be linked to a high-profile anti-graft investigation into activities at the top of the Founder Group, a Peking University-owned technology conglomerate. He is also believed to be close to Founder chief executive Li You, who allegedly financed hugely profitable securities trading carried out by one of Ma's relatives, according to a WeChat account run by Global People magazine under the People's Daily.

The Caixin report also alleged that Guo was connected to Wang Youjie, former Party chief of Zhengzhou, who was handed a suspended death sentence in 2007 for corruption. 

The report triggered an angry backlash from Guo, who issued a statement alleging that editor Hu has used her personal relationship with Li You to illegally secure a profitable stake in the Founder Group.

The statement, which was posted Sunday on Guo's company Pangu Plaza's official Weibo, has been taken down by Monday.