Trading of Meat Processor Shares Halted after Scandal

Trading of shares in China's largest meat processor was suspended Wednesday after an illegal additive was allegedly found in meat products in an affiliate of the company.

Shares of Shenzhen-listed Henan Shuanghui Investment & Development Co., Ltd. were suspended from being traded at 9:30 a.m. after China Central Television reported one of its affiliate, Jiyuan Shuanghui Food Co., Ltd., purchased pigs fed with Clenbuterol, according to the suspension notice.

Clenbuterol is a chemical used to prevent pigs from accumulating fat. It is banned as an additive in pig feed in China because it is poisonous to humans and can be fatal.

Shares of the company, Shuanghui Development (000895.SZ), fell Tuesday by the 10-percent daily limit to 77.94 yuan.

The Ministry of Agriculture sent a team to Henan Province on Tuesday to investigate, and the provincial government ordered 16 pig farms to halt pig sales and sealed feedstuff suspected to contain the additive.

The suspension notice said trading of shares would resume after relevant facts are verified.

Shuanghui Development and Jiyuan Shuanghui are both under Shuanghui Group, which is headquartered in Henan's Luohe City with a total assets of over 10 billion yuan (1.52 billion U.S. dollars). The group has factories in 12 provinces throughout China, producing cooked meat products such as sausage, and also has branches in Japan, Singapore, Philippines and the Republic of Korea, according to its website.