USANA Health (USNA) Responds to Allegations, Says "Confident" In China Operations

November 29, 2012 5:44 PM EST
USANA Health Sciences, Inc. (NYSE: USNA) responded to allegations from Citron Research related to its business in China. The company said they are confident that operations in China, through BabyCare, are in compliance with applicable regulations.

From the release:

"USANA's business in China is that of BabyCare, Ltd ("BabyCare"), a direct selling company organized under the laws of China. BabyCare has been granted a license to conduct direct selling in China and has a long history of doing business in China. Additionally, the Chinese government has regularly reviewed our business activities in China. We are confident that our operations in China, through BabyCare, are in compliance with applicable regulations, as those regulations have been interpreted and enforced by the government of China.

USANA's and BabyCare's policies each require that distributors comply with applicable laws and regulations. We believe that distributor compliance is critical to the integrity of our business, and, therefore, we are aggressive in ensuring that our distributors comply with our policies. We actively educate and train our distributors on our policies and procedures. Any distributor who fails to adhere to our policies is subject to disciplinary action, which may include, without limitation, warnings, fines, probation and, in more serious cases, termination of the distributor’s purchase and distribution rights."

Shares of USNA fell 5.6 percent today on the allegations.

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