JEWELERS in Shanghai are being investigated over claims they are manipulating the retail price of gold jewelry.
The Shanghai Development and Reform Commission said it launched the probe following a report in the People's Daily that 13 jewelers, including Shanghai Lao Feng Xiang, Lao Miao Jewelry and Hong Kong's Chow Sang Sang and Chow Tai Fook, were under investigation.
The report said the Shanghai Gold and Jewelry Trade Association set retail guide prices for gold jewelry, and asked jewelers to keep prices within 2 percent.
Shares of Shanghai-based gold jewelry makers and retailers fell after the report was published on the newspaper's website yesterday morning.
Lao Feng Xiang Co dropped 1.9 percent to 17.86 yuan (US$2.89). The jeweler declined to comment on the matter but said the company may issue an announcement today.
Shanghai Yuyuan Tourist Mart Co, another leading city retailer, saw its share price drop 4.4 percent in its price to 6.7 yuan. It couldn't be contacted yesterday.
Actively cooperating
Asked to comment on its investigation, the Shanghai commission said: "No decisive conclusion has been drawn about the case."
The trade association said it was actively cooperating with the commission.
In Hong Kong, the share price of both Chow Sang Sang and Chow Tai Fook fell yesterday.
Spokesmen at Chow Tai Fook, the world's largest listed jewelry chain, and Chow Sang Sang denied any involvement in the alleged manipulation of gold retail price in Shanghai and said the price was determined in accordance with international bullion price, which is unified nationwide.
They also emphasized that no self-admission reports on the allegations were submitted to the regulatory authorities on the Chinese mainland.
Shanghai is the major jewelry market on the Chinese mainland.
There was a rush for gold jewelry and gold bars in April after retail prices tumbled to a two-year low, in line with a reduction in global gold prices.
The investigation into jewelers is the latest by Chinese authorities over claims of business irregularities.
Milk powder producers and drugmakers are among those currently under investigation by Chinese authorities.
