Nu Skin Enterprises, Inc. (NYSE:NUS), the manufacturer and distributor of skin care and anti-aging products, released a letter to customers in China indicating that it is reviewing the practices of its employees and sales-force in the country and vowed to implement corrective actions.
Nu Skin suspends distributor recruitment
The company also said that it will stop its promotional meetings, thus suspending the recruitment of new distributors in China while conducting its internal review. Nu Skin Enterprises, Inc. (NYSE:NUS) made the decision after Chinese regulators started an investigation against the company over allegations that it is operating a pyramid scheme.
The company revealed in the letter to customers that based on its internal investigation that “some sales people failed to adequately follow and enforce” its policies and regulations. Nu Skin Enterprises, Inc. (NYSE:NUS) expressed disappointment and promised to provide additional training to strengthen its current policies. It also plans to educate its employees regarding the laws and regulations in China.
“We sincerely apologize for these unfortunate and unauthorized activities.” According to Nu Skin Enterprises, Inc. (NYSE:NUS). The company will provided an update regarding its internal review on February 6.
CEO denies pyramid scheme allegation
Nu Skin Enterprises, Inc. (NYSE:NUS) said it will continue to sell its products in China amid the ongoing investigation of Chinese regulators and its own internal revenue. Last week, M. Truman Hunt, chief executive officer of the company, denied the allegations and emphasized that Nu Skin is “absolutely not a pyramid scheme.”
In its statement last week, the company said the article published by the People’s Daily was inaccurate and exaggerated. Nu Skin Enterprises, Inc. (NYSE:NUS) emphasized that it is dedicated to operating in full compliance with applicable regulations as interpreted and enforced by the government of China.”
China’s probe on Nu Skin Enterprises, Inc. (NYSE:NUS) resulted to a significant decline in the stock price of the company. On Thursday and Friday, last week, the shares of the company declined more than 32%. The stock is currently trading at about $78.70 a share, down by nearly 1% as of this writing, around 2:46 PM in New York.