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Is Natural Health Trends Lying About A Chinese Regulatory Investigation?

We reported to our members on Monday of this week that eyewitnesses noticed uniformed officials removing computers from NHTC's Beijing office.

The company followed this with a statement saying it was "unaware" of any investigation.

Tuesday morning, news broke on several reputable Chinese media sites claiming the company had been raided and is under investigation.

(GeoInvesting Members received parts of this article on Monday 1/11/16 and early morning Tuesday 1/12/16. For information on signing up as a member to get exclusive information before the public, visit geoinvesting.com).

Yesterday, we put out an article to our members that Natural Health Trends (NASDAQ:NHTC) offices had been raided, citing eyewitness accounts from neighboring businesses in the company's Beijing building. Confirming our story yesterday are two major media outlets in China, including SINA Finance.

Yesterday morning, the company issued a press release saying it was unaware of any investigation. We have to question whether or not the company was aware of this investigation at the time, as evidence now seems to suggest it might have known ahead of hand.

We are eagerly awaiting a statement from the company at this point. This morning, it was reported on two reputable news sites that the company's Beijing offices had been raided and investigated. There are also photographs on Twitter that apparently show officials at NHTC's Beijing offices.

Here is the original source of the document, and a link to SINA Finance, which picked the story up. The content from the SINA Finance article stated the following, which we have translated below:

Our paraphrased translation:

On January 11th, 3PM, Beijing Chaoyang District SAIC and Public Security Bureau (the Police) raided and investigated NHTC's Beijing Office. The 21jingji.com news reporter was on the scene and witnessed several office people and members to cooperate with the investigation. Until the time of release, 21jingji.com reporter hasn't heard initial results from SAIC and Public Security Bureau officials.

(The below text was issued as an article to GeoInvesting members on January 11, 2016).

Game Over for NHTC?

"Should the Chinese government determine that our operations violate any applicable laws or regulations, there could be a material adverse effect on our business, financial condition and results of operations."

"Because our Hong Kong operations account for a majority of our overall business, and most of our Hong Kong business is derived from the sale of products to members in China, any material adverse change in our business relating to either Hong Kong or China would likely have a material adverse impact on our overall business."

- NHTC's Forward Looking Statements Disclosure, latest 10-Q

It looks like this time may have come.

For over seven years, GeoInvesting has been sharing the truth about companies that have been operating fraudulently or misleading U.S. shareholders with the investment public. Geo's track record includes over 12 delisted companies and over $15 billion worth of market cap in fraudulent companies exposed. Our focus during that time has been U.S. listed companies with operations in China, and while Natural Health Trends is a company technically based in the United States, it conducts most of its business in Hong Kong and China, leaving U.S. investors guessing as to what is really taking place across the pond.

Today, we believe we are on the cusp of the next big collapse in China. We believe that we have found the next U.S. listed company doing business in China that will collapse and ultimately wipe out shareholders.

The linchpin that has held together Natural Health Trends Corporation's explosive growth over the last few years has been the company's growth in Hong Kong and China. The company does not have a direct selling license in China, where, along with Hong Kong, it produces more than 90% of its revenues.

Multi-level marketing in China requires a direct selling license, but for years NHTC has been doing business in China via an e-commerce platform it is running from Hong Kong without this license. The company has told its shareholders that it believes it is complying with Chinese laws in the way it operates its business, but reports from China last week, combined with evidence we'll present, seem to tell a different tale. We are confident that if the company has been found by authorities to be using an illegal multilevel marketing model in China, it could ostensibly end the business for good.

Last week, questions were raised about whether or not NHTC was under investigation by Chinese authorities. Today, we will present our evidence that the company is under investigation, and we share eyewitness accounts from our on-the-ground research that have told us government authorities were on the scene at the company's Beijing office removing computers.

We will present distributor material that we were able to source from a Chinese website that shows what we believe to be evidence that the company is running an illegal multilevel marketing company in China without a direct selling license.

All of this is corroborated by two suspiciously timed memos from the company to its Chinese distributors, admonishing them, just days after the commencement of the alleged investigation, to not use the company's name or logo when conducting business or communicating online and then notifying them of a planned suspension of NHTC's Hong Kong membership services website.

Confirming Last Week's Scattered Reports with Our Own Team

News broke in China on the...


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