China’s Vaping Queen Sees Fortune Plunge 65% After Chinese Government Probe

Chinese e-cigarette billionaire Chu Lam Yiu is under investigation from Chinese authorities, causing shares of her company, Hong Kong-listed Huabao International, to fall by over 65% on Monday.

Chu, who serves as chair and CEO, is currently under investigation for “suspected disciplinary violations” of an unclear nature, the fragrances and tobacco flavoring supplier announced on Monday.

“Up to the date of this announcement, the company has not been provided with any details of the nature of the suspected violations of Ms. Chu that is currently being investigated,” the company said in a filing to the Hong Kong Stock Exchange. “The business operation of the Group remains normal.” The company noted that the probe is being conducted by the Leiyang City Supervisory Committee, a government body based in Hunan province, southern China.

Chu, 52, owns approximately 70% of Huabao International’s shares. Often dubbed “China’s vaping queen” for overseeing Huabao International’s entry into the e-cigarette market, Forbes estimates her net worth at $2.6 billion as of Monday’s close. In the most recent rankings of China’s richest, published in November, Forbes estimated Chu’s net worth at $5.8 billion.

In 1996, Chu founded the precursor to Huabao International at the age of 26. The company began trading on the Hong Kong stock exchange through a backdoor listing after acquiring a listed company in 2004, and completed a reverse merger a decade after its founding, in 2006.

In 2012, Huabao International was targeted by Anonymous Analytics, an arm of the hacker group Anonymous, which accused the Chinese tobacco and fragrance company of overpaying several companies it bought from Chu. As a result, Huabao International asked to suspend trading of its shares on the Hong Kong stock exchange. 

Shares in Huabao International slid by 8% in early August 2021 after state media outlet Xinhua called for the tightening of restrictions on e-cigarette sales, due to young students finding ways around the nationwide ban on sales of e-cigarettes to those under 18.