April 13 (Bloomberg) -- Avon Products Inc., the world’s largest door-to-door cosmetics seller, suspended four executives as part of an internal investigation into practices at its China unit. The shares dropped the most in five months.
The four employees are S.K. Kao, general manager of Avon China; Jimmy Beh, former head of finance at the China unit and currently in a sales role; C.Q. Sun, head of corporate affairs in China; and Ian Rossetter, former head of internal audit and now a vice president in the company’s finance department, Jennifer Vargas, a spokeswoman for Avon, confirmed.
“Four associates have been asked to take administrative leave of absence, pending the outcome of the matter,” Vargas said by telephone today. “It’s an ongoing investigation, so no conclusions have been reached.”
The Wall Street Journal reported the suspensions last night.
Avon said in October 2008 that it started a voluntary investigation into compliance with the Foreign Corrupt Practices Act, which outlaws bribing foreign officials, at its China operation. The New York-based company reported sales of $100.7 million, or 3.2 percent of revenue, from China in the quarter ended Dec. 31.
Laura Sweeney, a Justice Department spokeswoman, declined to comment for this story.
Avon fell $2.69, or 7.7 percent, to $32.07 at 10:46 a.m. in New York Stock Exchange composite trading after earlier touching $31.89 for the steepest intraday decline since October. Before today, the shares had advanced 10 percent this year.
The Wall Street Journal also said the company is looking into the alleged purchase of trips to Europe and the U.S. for Chinese officials and that the investigation has spread to at least a dozen countries.
Vargas declined to comment on specifics of the probe.
