Noodle giant's shares plunge after scandal
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Xinhua, July 29, 2011
Hong Kong listed shares of a noodle giant have slumped drastically after the company was accused of lying about the ingredients it used in its soups.
Closing share price of Ajisen (China),one of China's largest fast food restaurant chain operators and the franchisee Japan's Ajisen Ramen on Chinese mainland, fell 10.5 percent from HK$17.82 ($2.29) on Monday to 15.94 on Thursday, wiping more than HK$2 billion off its market value.
The company issued a statement on its website on Sunday, admitting that it had used concentrated liquid not pork bones to make its noodle soup. However, Ajisen (China) still insisted that ingredients of its seasonings were extracted from "pork bones."
In the statement, it cited a report by a lab under the China Agricultural University (CAU) after a test evaluation, emphasizing the calcium amount in a bowl of soup is three times higher than the calcium contained in the same amount of milk.
But Fan Zhihong, an associate professor with the CAU who took part in the evaluation, responded by posting on Weibo.com that the sample they tested was actually the concentrated liquid, and the soup bought by customers had been hugely diluted.
"There was a huge difference in the calcium amount between the test sample and the actual product, and the company may have mislead customers," said Fan.
Later on its website, Ajisen (China) admitted there was something wrong with the calculation.
Wu Dong, partner of a law firm, told Xinhua that Ajisen (China) has the obligation to tell its customers what in its dishes in accordance with the Law on the Protection of Consumers Rights and Interests.
Some law experts pointed out that China's food safety laws does not provide a big enough deterrent.
Since its initial launch in Shanghai in 2001, Ajisen (China) has expanded to one of the largest noodle food chain restaurants, with 588 outlets in the Chinese mainland, while in its hometown Japan, there are only 102 outlets.
According to Hurun China Rich List, the revenues of Ajisen (China) amounted to HK$2.68 billion last year and its chairwoman, Pan Wei, has held the title of the richest woman in catering sector for four years in a row.
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