Yesterday People’s Daily (The official Newspaper Of The Communist Party) reported that Nu Skin was operating as an illegal pyramid scheme under China’s direct selling laws, and may have provided false reporting. Nu Skin was quick to respond with a statement…
NU SKIN RESPONSE TO PEOPLE’S DAILY ARTICLE
PROVO, Utah, Jan. 15, 2014 /PRNewswire/ — Nu Skin Enterprises, Inc. (NYSE: NUS) statement on the People’s Dailyarticle:
“The article that appeared in today’s People’s Daily contains inaccuracies and exaggerations that are not representative of Nu Skin’s business in China. The reporters did not attempt to verify any information with Nu Skin. We do not believe that the article was the result of any particular government inquiry.
“We are dedicated to operating in full compliance with applicable regulations as interpreted and enforced by the government of China. Nu Skin has an 11-year history of doing business in China under these regulations. Our business activities are regularly monitored by the government in this rapidly growing marketplace. As is our practice, we will communicate openly with regulators to address questions arising from this article.
“Nu Skin has government-approved direct selling licenses to operate in a majority of provinces in China. The most recent government licensure in July further expanded our direct selling footprint to include 19 of the country’s 32 provinces.
“We actively educate our sales force to follow all regulations as well as company policies and procedures, and any member of our sales force not operating in accordance with local law or with our company policies is subject to discipline.” (read full response here)
Today, the New York Stock Exchange halted trading of Nu Skin stock (NUS) when shortly after China released a statement, announcing they were opening an investigation after the People’s Daily article. NuSkin stock fell 38% causing the system to stock trading until NYSE authorities could determine if something went wrong or this was normal trading due to critical news.
Nu Skin released the following statement today in response to the China Invesitgation…
NU SKIN ISSUES STATEMENT ON CHINA BUSINESS
PROVO, Utah, Jan. 16, 2014 /PRNewswire/ — Nu Skin Enterprises, Inc. (NYSE: NUS) today issued the following statement in regards to its China business.
“We are aware that Chinese regulators have now initiated investigations to review issues raised by recent news reports. The government regularly monitors all businesses in this rapidly growing marketplace, and as is our practice, we will continue to communicate openly with regulators to address any questions they may have.
“As part of our ongoing commitment to comply with all applicable Chinese regulations, we have initiated our own province-by-province business review and will invite relevant regulators to provide guidance. Given the substantial growth in ourChina salesforce over the last year, we are also taking additional steps to reinforce our training and education efforts. As we work through this evolving situation and remain focused on long-term growth, there will likely be a negative impact onChina revenue, but it is too early to know whether our previous guidance will be affected.
“We remain committed to working cooperatively with the government to ensure long-term, sustainable growth in this important market. Nu Skin has an 11-year history of doing business in China. We are dedicated to operating in full compliance with all applicable regulations as interpreted and enforced by the government of China.” (read the full statement here)
The following are additional links to articles covering the Nu Skin story.
Wall Street Journal – Nu Skin: Scathing Article Contains ‘Inaccuracies and Exagerations’
Investor’s Daily – Nu Skin Sinks As China Business Practices Critized