Guangdong Tannery Ltd has said that Customs authorities in mainland China have frozen the bank accounts of one of its main business units, while its former company executives are investigated for smuggling.

Operations have been suspended at Nanhai City Tongyuan Tanning Co., despite the company claiming it has not been party to any wrongdoing. The firm said the investigation is linked to a rogue operation uncovered in 2002, which involved a number of its former staff running a parallel tanning business to their own benefit while using the company name and resources.

Trading in the shares of Guangdong Tannery Ltd were suspended last week pending an announcement in relation to price sensitive stock information, the Hong Kong stock exchange said.

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