One of the mainland's biggest dairy producers said yesterday that it was under investigation, apparently because it illegally concealed losses made in trading treasury bonds.
The news sent the company's stock plunging 10 per cent in the first 25 minutes of trading on the Shanghai exchange before it was suspended.
Inner Mongolia Yili Industrial supervisory board chairman Yang Gui said the region's High People's Procuratorate was investigating the firm. He declined to give details.
Officials of the procuratorate declined to comment.
On the Shanghai stock market, Yili's shares dropped to 9.77 yuan from its Friday close of 10.86 yuan.
Yili is locked in a fierce battle with China Mengniu Dairy for top place in the mainland's booming dairy business.
The battle is given additional piquancy by both companies being based in Hohhot, the capital of Inner Mongolia. Niu Gensheng, the chairman and one of the founders of Mengniu, had also worked for 20 years at Yili, rising from bottle washer to vice-president, before he was fired over policy disagreements.
