Nu Skin CFO calls China model "kosher," plans no changes
By Phil Wahba and Daniel Bases
Aug 15 (Reuters) - Nu Skin Enterprises Inc's finance chief on Wednesday dismissed a noted short-seller's claims that the company's sales model in China was illegal, and said there was no need to change it.
"We're confident that it's kosher," Chief Financial Officer Ritch Wood said in an interview. "We don't feel like we need to make any changes to our business model," he said, adding that Chinese officials have never asked Nu Skin to do so.
On August 7, Nu Skin shares fell 9.9 percent to $44.36 after Andrew Left's Citron Research published a report claiming that Nu Skin's sales model on mainland China amounted to an illegal multi-level marketing scheme and said its fast-growing Chinese business could face seizure by authorities there.
The company's shares closed at $42.50 on Wednesday.
Wood said that Chinese authorities had not been in touch with the company about Citron's allegations.
Left, who is based in Los Angeles, confirmed to Reuters when reached by phone on Wednesday that he had not contacted Nu Skin's management prior to posting his report on Citron's website.
"I am not sure he has the intention to understand how the company operates," Wood said.
Three months ago the shares of Nu Skin's rival Herbalife Ltd were pummeled when prominent short-seller David Einhorn questioned its distribution model. Continuación...