NEW YORK (Reuters) - Direct-selling and e-commerce company Natural Health Trends Corp rejected allegations that Chinese authorities were investigating it, reversing a drop in its shares fueled by reports about raids in its offices in Beijing.
The company’s shares shot up as much as 22 percent to $23.30 on Wednesday, recovering from a 17 percent drop earlier in the session.
Natural Health, whose subsidiaries sell personal care and wellness products under the NHT Global brand, said Chinese government authorities told the company that there was insufficient evidence to warrant an investigation.
No computers or other company property had been removed from its offices by the authorities.
The stock has fallen 50 percent this year, with volume soaring since Jan. 7 after reports that China’s government was investigating the Los Angeles County, California-based company for violating multi-level marketing laws.
Natural Health said on Wednesday its staff attorney and branch manager met with the Beijing Chaoyang District State Administration For Industry & Commerce (SAIC) and the Public Security Bureau at its Beijing office on Monday.
Several public security officials also visited the company’s Guangzhou office as part of a routine examination on Wednesday. The Guangzhou office is applying for a direct selling license, the company said.
The company said it believes that some Chinese accusers, working in tandem with parties making online posts, have been aggressively pressing the Beijing City government to conduct an investigation of the company.
The stock had fallen 9 percent or more in eight of the past 12 sessions, coinciding with a rout in Chinese stock markets. The Shanghai composite index is down 16.7 percent so far in 2016.
On Tuesday, traders and financial publications shared online links to photos that they said showed State Administration for Industry and Commerce officials inside the office of NHT Global in Beijing on Monday.
Reuters has not been able to confirm the raid report, and the SAIC was not immediately available for comment.
The company also said on Wednesday that it has raised its stock repurchase program to $70 million from $15 million. Shares of $10 million have already been bought back.
Reporting by Rodrigo Campos in New York and Sruthi Ramakrishnan in Bengaluru; Editing by Lisa Von Ahn and Don Sebastian