Jan 21 Skincare products maker Nu Skin
Enterprises Inc said it would suspend promotional
meetings where it recruits new distributors in China, days after
Chinese regulators launched probes into its business practices.
The company said in a letter to customers on Tuesday that an
internal investigation found instances where some of its sales
representatives had failed to "adequately follow and enforce our
policies and regulations."
"We sincerely apologize for these unfortunate and
unauthorized activities," the company said.
Chinese regulators launched probes last week into Nu Skin
after local media accused it of exaggerating its influence and
creditworthiness in brochures and organizing "brainwashing"
Short sellers and other critics have accused companies such
as Nu Skin and Herbalife Ltd of running illegal
pyramid-type schemes, questioning their distribution model where
distributors make money not only from their own sales, but also
from those by people they recruit to become distributors
Nu Skin said on Tuesday that it would take corrective
actions, which include further training and educating its
employees in China.