BaWang Sues Next Magazine for Defamation Over Shampoo Cancer Risk Report

BaWang International (Group) Holding Ltd., China’s largest herbal shampoo maker, filed a complaint against Next Magazine Publishing Ltd. over a report that said two of its products contain a substance that may cause cancer.

BaWang is seeking unspecified damages from the weekly for “defamation” and “malicious falsehood,” according to the complaint filed in Hong Kong’s High Court July 21. It’s also claiming compensation for loss of sales, it said.

Next Magazine Editor-in-Chief Lee Chi-ho wasn’t available for comment.

BaWang, which uses movie star Jackie Chan and Chinese pop singer Faye Wong to promote its products, slumped 23 percent from July 14 to July 16 after the report said two of the company’s products contain a substance that may cause cancer. The company’s market capitalization declined by HK$3.9 billion in those three trading days.

The herbal shampoo products don’t threaten consumers’ health, China’s State Food and Drug Administration said on July 16.

BaWang rose 0.2 percent to HK$4.90 at 11:43 a.m. in Hong Kong trading.

To contact the reporter on this story: Wendy Leung in Hong Kong at wleung12@bloomberg.net; Debra Mao in Hong Kong at dmao5@bloomberg.net

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