Nu Skin issues statement on China business

PROVO, Utah – Nu Skin Enterprises, Inc. (NYSE: NUS) responded to allegations that the company’s China business is involved in pyramid schemes.

Last week, China government-backed The People's Daily criticised the U.S. direct marketing company's global operations and said the company is operating an illegal pyramid scheme in China.

In its statement, Nu Skin said it remains in contact with Chinese regulators, but did not comment directly on allegations raised in recent reports.

“We are aware that Chinese regulators have now initiated investigations to review issues raised by recent news reports. The government regularly monitors all businesses in this rapidly growing marketplace, and as is our practice, we will continue to communicate openly with regulators to address any questions they may have.

“As part of our ongoing commitment to comply with all applicable Chinese regulations, we have initiated our own province-by-province business review and will invite relevant regulators to provide guidance. Given the substantial growth in our China salesforce over the last year, we are also taking additional steps to reinforce our training and education efforts. As we work through this evolving situation and remain focused on long-term growth, there will likely be a negative impact on China revenue, but it is too early to know whether our previous guidance will be affected.

“We remain committed to working cooperatively with the government to ensure long-term, sustainable growth in this important market. Nu Skin has an 11-year history of doing business in China. We are dedicated to operating in full compliance with all applicable regulations as interpreted and enforced by the government of China.”

A global direct selling company, Nu Skin operates in 53 markets worldwide. The company reported sales of $667.4 million in China, which accounted for a nearly a third of the company’s sales for Jan-Sep 2013.
Read the article (in Chinese) in The People’s Daily