July 23 (Bloomberg) -- 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 on July 21. It’s also claiming compensation for loss of sales, it said.
Next Magazine’s 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 between July 14 and July 16 after the magazine’s report. The company’s market capitalization declined by HK$3.9 billion ($500 million) in those three trading days.
The herbal shampoo products don’t threaten consumer health, China’s State Food and Drug Administration said on July 16.
BaWang fell 1 percent to HK$4.84 in Hong Kong trading today. The stock has lost 18 percent since July 14, compared with a 1.9 percent gain in the city’s benchmark Hang Seng Index.
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