CCTV criticism causes firms’ shares to slump

After China Central Television (CCTV) slammed some companies for poor quality products or cheating consumers on a report that aired March 15, World Consumer Rights Day, several of the listed companies criticized saw share price drops or suspended their shares trading Monday.

The share price of Japan's leading camera maker Nikon Corp dropped 1.65 percent Monday and closed at 1,730 yen ($16.70) in Tokyo Stock Exchange.

Nikon was criticized by the CCTV report for a recurring problem in which black dots appeared on pictures caused by dust falling onto the CMOS sensors of its D600 model, a high-pixel, single-lens reflex camera that Nikon launched in 2012 and priced at about 13,000 yuan ($2,100).

Nikon announced on its Sina Weibo account Monday again that the company took the CCTV report seriously and that it provides free checks and cleaning services to D600 users, as well as replacement of the shutter or the whole camera if the black dots problem cannot be solved.

Nikon has also begun taking the D600 off shelves Saturday, according to its Weibo announcement.

Compared with Nikon, domestic enterprises suffered a greater impact from CCTV's report.

Beijing-based Gohigh Data Networks Technology Co and its "reported" parent company Datang Telecom Technology Co have applied for suspension of share trading Monday for fear of slumping share prices due to the negative report.

CCTV reported that Gohigh makes profits from installing applications on smartphones before they are sold and some applications collect users' personal information without informing the users and cannot be deleted.

Gohigh denied the report in a statement released on the website of the Shenzhen Stock Exchange Sunday, which said the company did not promote malware or steal users' private information and that their pre-installed apps can be removed by users.

Datang Telecom refuted the market rumor Monday that it is the parent company of Gohigh, claiming that they are both subsidiaries of a shareholder named Datang Telecom Technology & Industry Group.

Shenzhen-listed Haima Automobile Group Co Ltd also suspended its share trading Monday after being reported as forging low fuel consumption data in vehicle tests.

Zhejiang Conba Pharmaceutical Co, which was reported by media as being the parent company of Zhejiang Kangnuobang Health Food Co, announced Monday that Conba has never invested in or cooperated with Kangnuobang.

CCTV report said that several food companies in South China's Guangdong Province, East China's Shandong and Zhejiang provinces, such as Kangnuobang, labeled cod-liver oil as fish oil for infants and children despite knowing that cod-liver oil is not intended for infants and children.

Liu Jie, the mother of a three-year-old boy, watches CCTV's consumer program each March 15 and is concerned the most about food safety issues, she told the Global Times Sunday, noting she will never buy products from the enterprises exposed by the annual program.

Conba has suspended share trading since November 25, 2013 due to an upcoming major announcement.

Some companies in the same or similar industries as those in the program also appeared to be negatively impacted.

Shenzhen-listed health food maker By-health Co Ltd, which was not even mentioned in the report, also announced Sunday that it does not label its cod-liver oil as a regular product.

Another health food maker Joincare Pharmaceutical Industry Group Co, also not mentioned in the program, saw a 0.55 percent share price drop Monday, closing at 5.43 yuan.

After CCTV reported some smaller domestic producers, including Fujian Sanming Food Additives Co Ltd and Hunan Jinlong Gelatin Co Ltd, make gelatin with polluted raw materials, Qinghai Gelatin Co Ltd and Baotou Dongbao Bio-Tech Co Ltd, two leading gelatin manufacturers, saw 10.08 percent and 10.04 percent share price increases respectively Monday.

Hongbo Co Ltd, a listed stationery producer, announced Monday that it did not produce any unsafe products reported by CCTV and Hongbo's share price increased 3.04 percent Monday.

"CCTV's annual program on protecting consumers raises public awareness, but a TV program is not enough to build a safe market," Qiu Baochang, president of the legal panel at China Consumers' Association, told the Global Times Monday.

"A safe market needs continuous and joint efforts from administrative agencies, media and the public."