Huabao International Holdings, China’s largest e-liquid, tobacco flavoring and fragrance company, fell by more than 65 percent after Chinese regulators announced an investigation into the company’s majority shareholder, Chu Lam Yiu. The investigation is reportedly part of President Xi Jinping’s crackdown on corruption.
Chu, one of China’s richest self-made woman billionaire, with a net worth valued at $5.5 billion, is being investigated by authorities for “unspecified suspected disciplinary violations,” according to a Hong Kong stock exchange filing. The company said in a statement it was informed of the investigation by its subsidiary Huabao Flavours & Fragrances. “Up to the date of this announcement, the company has not been provided with any details of the nature of the suspected violations of Ms. Chu that is currently being investigated. The business operation of the group remains normal,” the company stated.
It added that the subsidiary received a case filing notice from the Leiyang City Supervisory Committee, indicating that the probe was being carried out by the Chinese Communist party and the local government, according to the Financial Times.
No further details were provided. The company declined to answer further questions, according to the story. Huabao, which Chu launched in her mid-20s in 1996, produces flavors and fragrances used by tobacco manufacturers, including for the e-cigarette or vaping market, as well as food companies. The company’s growth has catapulted Chu to rank among China’s richest people.
Like many high-profile Chinese businesspeople, she has also served on various industry and government advisory committees. The probe into Chu comes as China’s long-running anti-corruption campaign gathers momentum as Xi seeks to secure a historic third term.
