Beijing is expected to give the green light to a Taiwanese-owned company to resume its direct marketing business in Shanghai after the local authorities suspended it last month for an investigation. Chang Hung-chih, a Taiwanese businessman who markets an aphrodisiac directly through a shop in Pudong, said the local Public Securities Bureau and the State Administration for Industry and Commerce would issue permits within a month. He said his shop was reported to the authorities on suspicion of conducting illegal direct sales on April 13, but they have since found his business did not contravene the laws and regulations governing direct marketing. 'The authorities have found my business complied with the laws and they are interested in learning my marketing methods . . . in order to help turn around state-owned enterprises,' Mr Chang said. He said the governments of about a dozen cities on the mainland had expressed an interest in co-operating with him. Mr Chang set up Haohua Trading in Pudong at the start of this year to sell an aphrodisiac produced by a Sino-Japanese joint venture in the northeastern city of Jilin city. He owns the shop but manages it under the name of his Shanghainese friend because domestic sales distribution is still off-limits to foreign investors. Mr Chang said the authorities knew the situation and allowed him to operate. Direct marketing, where sales representatives offer products they have on hand to friends and associates, was banned in the mainland in 1998 after Beijing found a number of firms were engaged in fraudulent practices. To comply with this ruling, Mr Chang said his sales staff did not carry goods when introducing the products to customers. 'They only deliver the goods, limited to two items at a time, after the customers have placed orders,' Mr Chang said. He said the sales staff were required to pay 260 yuan (about HK$243.33) for 310 yuan worth of goods, thereby effectively earning a commission of 50 yuan per sale. The goods could be returned for refund. His shop recruited staff from the local government-run employment agency. The candidates were required to be educated or 'well-connected to the authorities or with business circles', said Mr Chang.