SHANGHAI (Reuters) – Authorities in the Chinese city of Leiyang are investigating the CEO of Huabao International Holdings Ltd, one of China’s top e-cigarette flavour makers, over “suspected disciplinary violations,” according to a company filing on Monday.
Shares in the Hong Kong-listed firm plunged more than 67% on the news.
Chu Lam Yiu, the company’s chairwoman, chief executive officer, executive director and controlling shareholder, is under investigation for “suspected disciplinary violations,” the filing said without giving details. It added that business operations remained normal.
A spokesperson for Hubao didn’t immediately respond to a request for comment. Chu could not be reached for comment.
Chu controls 71% of Huabao’s shares, according to the company.
According to independent wealth tracker, the Hurun Report, Chu was the 122nd wealthiest person in China with a net fortune of $7.6 billion as of early 2021.
The probe comes as many Chinese business moguls in several sectors have been ensnared by an anti-corruption campaign led by Beijing. It also comes as authorities rein in China’s e-cigarette industry.
In late 2020, China’s State Tobacco Monopoly Authority issued a draft rule requiring e-cigarette makers to receive a special licence from the regulator, signaling the sector’s numerous private entities will soon face tighter state control.
(Reporting by Josh Horwitz; Editing by Bernadette Baum)
