Public security authorities launched an investigation on Tuesday into a drug manufacturer in Tianjin suspected of engaging in a pyramid scheme and false advertising.
A team from the Tianjin Administration for Market Regulation and the Tianjin Health Commission said the probe into Quanjian Nature Medicine Technology Development Co has made periodic progress after the drugmaker was accused of making huge profits by misleading consumers about the effectiveness of its products.
Public security bodies have stepped in to continue the investigation, according to online news portal tjyun.com.
Authorities have also shut down Quanjian's licensed physiotherapy parlors that provide fire therapy against fire safety regulations, and a three-month special campaign to supervise and regulate the healthcare product market is also underway.
The joint team said the Tianjin government accepts a high degree of responsibility for people's health and will always protect people's interests in accordance with the law and severely punish those who violate the law, local news portal tjyun.com reported. Pyramid schemes operating under the guise of direct selling will not be tolerated, it said.
Quanjian received its direct-selling license in 2013 which permitted the company to sell 40 products in 10 cities across the country, according to China's Ministry of Commerce. The products on the list are mostly cosmetics along with some healthcare and sanitary products. However, some of Quanjian's most popular products such as medicines which claim to cure cancer and insoles are absent from that list.
The father of a girl who died of cancer after taking medicine supplied by Quanjian told Beijing News on Wednesday that he will "soon file a lawsuit against the company".
The father, surnamed Zhou, said he will not only sue the drugmaker for false advertising but also has evidence to prove that it was Quanjian's products that caused the deterioration of his daughter, Zhou Yang.
This will be Zhou's second attempt after he lost his first lawsuit in 2015 shortly before his daughter died.
The accusation came when an online healthcare information platform, Dingxiang Doctor, published a report in late December that cited Zhou's story and claimed that Quanjian promoted expensive but ineffective products around the country through a pyramid scheme.
Following the report, the joint team conducted a site investigation to find out if the company was responsible for Zhou Yang's death and whether it engaged in exaggerated promotion, illegal pyramid selling or food safety violations.
Quanjian has denied any wrongdoing and said it was cooperating with investigators.
Chinese netizens have been mocking Quanjian for objecting to a critical story published by Xiakedao, a verified WeChat account operated by China's biggest newspaper, the People's Daily.