(Reuters) - William Ackman's hedge fund Pershing Square Capital Management LP said it would unveil on Tuesday details about Herbalife Ltd's (HLF.N) violations in China as the activist investor sharpened his attack against the nutritional products company.
Ackman has called on regulators to investigate Herbalife's distribution model which he calls a "pyramid scheme," where a company makes most of its money by recruiting distributors rather than selling products to real customers.
Herbalife has vehemently denied operating a pyramid scheme. Ackman's "accusations are provably false," Chief Financial Officer John DeSimone said in a New York Times article on Monday.
Pershing Square responded to the article by saying Herbalife failed to address a number of questions, including those about its sales practices and distributor remuneration.
"Herbalife has failed to respond to basic questions that we and others have continued to raise," the fund said in a statement.
The firm said it would release a presentation on Tuesday highlighting the company's violations of laws in China.
Billionaire investor Ackman has taken a $1 billion short position against Herbalife, betting that the company's share price will eventually fall to zero.
Ackman's latest volley comes nearly two months after China's regulators launched probes into the Chinese operations of U.S. based skincare products maker Nu Skin Enterprises Inc (NUS.N), which operates a business model similar.
Herbalife raised its current-quarter forecast last month after sales in China jumped more than 120 percent in the fourth quarter of 2013.
Herbalife's shares closed up 2.2 percent at $66.16 on the New York Stock Exchange on Monday.
Reporting by Siddharth Cavale in Bangalore; Editing by Joyjeet Das