China's Biostime shares halted pending statement on price-fixing probe
HONG KONG (Reuters) - Infant milk producer Biostime International Holdings Ltd 1112.HK, which imports most of its products from overseas, said on Tuesday its shares were suspended pending an announcement related to an investigation by Beijing's top economic planning agency.
The company, which has a market value of $3.4 billion, had said previously that a unit based in China's southern city of Guangzhou was being investigated by the National Development and Reform Commission (NDRC) over suspected price-fixing.
Biostime, in a statement to the Hong Kong stock exchange in late July, said it planned to lower prices of infant formula products by 5-10 percent and that the investigation into its unit was ongoing.
The latest news comes amid a crackdown on business practices in China where several international milk powder producers have cut prices after the NDRC said it was investigating possible price-fixing and anti-competitive behavior.
In a further blow to the industry, New Zealand's Fonterra (FSF.NZ: Quote) said over the weekend it had found bacteria which can cause botulism in some of its dairy products, prompting China to recall affected products.
All of Biostime's infant powder is imported from France and Denmark and it does not take any from New Zealand's Fonterra, the company said in statement on its website.
Foreign infant milk formula is a highly coveted item in China after a 2008 tainted infant formula scandal that left at least six children dead and damaged public trust.
Shares of Biostime, which listed in 2010, had fallen 3.6 percent to HK$41.8 prior to the trading halt, lagging a 1.8 percent fall in the benchmark Hang Seng Index .HSI as at 0228 GMT (10:28 p.m. Monday EDT).
(Reporting by Donny Kwok and Anne Marie Roantree; Editing by Matt Driskill)
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