Firms in hot water after consumer expose

Cici Cao

China's stock exchanges and regulators have launched investigations into several firms accused of unethical business practices in an expose aired by state-owned CCTV during the mainland's Consumer Rights Day on March 15.

The report revealed that Liangshan Xixi Paper Products had bought defective baby diapers and sanitary pads from well-known brands at prices of 260 yuan (HK$279.22) to 1,400 yuan a tonne and then repackaged and resold them at inflated prices of up to 8,000 yuan per tonne. The brands included Purcotton from Winner Medical, Freemore from Chongqing Baiya Sanitary Products and Sofy from Japan's Unicharm.

Following the expose, the Shenzhen Stock Exchange ordered these brands to investigate their supply chains.

Purcotton denied business ties to Liangshan Xixi, Freemore said it has launched a probe and Sofy pledged to cooperate with authorities over counterfeit products.

Also, disposable underwear factories in Shangqiu, Henan, were accused of skipping sterilization procedures. Sichuan Langsha was named as a client but denied any links with the factories in response to an inquiry by the Shanghai Stock Exchange.

Other violations ranged from excessive appliance repair fees, food safety breaches, illegal high-interest e-loans and personal data leaks to spam calls, online lotteries and substandard wire and cables.