BOSTON Feb 28 Billionaire investor William
Ackman, who has long claimed Herbalife Ltd is a fraud,
on Friday said he would provide proof next month that the
nutrition and weight-loss company is running a pyramid scheme in
Ackman launched his latest broadside against Herbalife on
Friday morning in a short press release that promises details
about his investigation into the company's business in China. He
will hold a conference call on March 11.
"The report will show that Herbalife's business in China
operates much like the company's business in the rest of the
world - as a pyramid scheme," the release said.
Herbalife has steadfastly denied running a pyramid scheme,
where participants earn more in recruiting new members into the
operation than from selling the company's products outside of
Herbalife did not immediately respond to requests for
comment on Friday morning.
For more than a year, Ackman's $12 billion Pershing Square
Capital Management hedge fund has bet just over $1 billion that
Herbalife's share price would eventually fall to zero amid
regulatory scrutiny. So far no regulator has acted, and the bet
has lost money, ranking as the biggest loser in the fund's
Shares of Herbalife were down 0.1 percent at $66.93 in
morning trading in New York.
But Ackman has said he remains optimistic. He and his staff
have met with U.S lawmakers and regulators to push their case,
and civil rights groups have joined in the battle against the
company by claiming that its promises that people can earn money
fast by becoming a distributor are untrue.
Ackman has highlighted some of Herbalife's top distributors
on a website in the last several weeks.
Friday was also the deadline set by U.S. Senator Edward
Markey for the Securities and Exchange Commission and the
Federal Trade Commission to respond to his request that the two
regulators probe the company.