China's CCTV exposes industry scandals, triggers Stock Exchange inquires

China state-owned CCTV exposed industry malpractices on Consumer Rights Day on March 15, involving several A-share listed companies, prompting urgent inquiries from mainland stock exchanges over the weekend.

The investigation revealed that Liangshan Xixi Paper Products in Jining, Shandong, purchased defective products and production waste from manufacturers and selected “relatively intact” baby pull-up diapers and sanitary pads to refurbish and resell.

Brands involved include Purcotton from mainland-listed Winner Medical, Freemore from A-share Chongqing Baiya Sanitary Products and Sofy from Japan’s Unicharm.

CCTV reported that Liangshan Xixi bought defective products for 260 yuan (HK$279.22) to 1,400 yuan per ton and resold them for up to 8,000 yuan per ton.

The Shenzhen Stock Exchange ordered related brands to investigate supply chains.

Purcotton denied business ties to Liangshan Xixi, Freemore has launched an internal probe and Sofy pledged cooperation with authorities against counterfeits.

CCTV also uncovered malpractice in disposable underwear factories in Shangqiu, Henan, where producers reportedly skipped sterilization procedures, despite labels suggesting otherwise.

Sichuan Langsha was named as a client but denied any cooperation with those factories in response to the Shanghai Stock Exchange.

Other misconduct uncovered include excessive appliance repair fees, food safety breaches, illegal high-interest e-loans, personal data leak, artificial intelligence spam calls, online lotteries, as well as substandard wire and cable sales.

Cici Cao