China orders investigation of Nu Skin case

BEIJING Thu Jan 16, 2014 7:55am EST

BEIJING Jan 16 (Reuters) - China's State Administration for Industry and Commerce (SAIC) on Thursday ordered local authorities to investigate media reports that allege skincare products company NU Skin Enterprises Inc distributes false information and conducts illegal business in China, state news agency Xinhua said.

Xinhua quoted an SAIC spokesman as saying the administration would take legal measures against any legal violations if investigation results showed the media reports were factual.

The People's Daily, the Communist Party mouthpiece, said on Wednesday that NU Skin had been exaggerating its influence and creditworthiness in company brochures by passing advertisements for news reports, and organising "brainwashing" gatherings.

On Thursday, the newspaper said the company was suspected of conducting illegal multi-level marketing activities.

NU Skin said on Thursday that the article published the previous day contained "inaccuracies and exaggerations that are not representative of NU Skin's business in China". It did not believe, it said, "that the article was the result of any particular government inquiry".

State media took many foreign firms to task last year over pricing, poor quality and shoddy customer service. They include Starbucks, Apple, Samsung Electronics , the KFC restaurants of Yum Brands Inc and British drugmaker GlaxoSmithKline PLC