BaWang ensures safety of its shampoo products

The company's shares tumble by 18% following a magazine report accusing products of having cancer-causing chemicals.

Chinese herbal shampoo maker BaWang International (Group) said on Wednesday that its products met safety standards as its shares tumbled following a media report that they contained a toxic chemical.

The Hong Kong-listed company made the statement in response to a report in local magazine Next alleging that tests showed some of the company's shampoo products contained the cancer-causing chemical dioxane, sending its shares down 18 percent to HK$4.81 on Wednesday. By the midday trading break, the shares were at HK$5.05, down 14.1 percent.

BaWang said in a statement obtained by Reuters that all of its products had undergone stringent quality tests and met standards required by the mainland and Hong Kong authorities.

It said its products also complied with safety requirements prescribed by the U.S. Food and Drug Administration and "the level of dixoane is far below the world safety guidance and will not jeopardise health".

BaWang, which hired movie star Jackie Chan and pop singer Faye Wong to promote its products, was one of most popular IPOs in 2009, when it listed on July 3.

View the full report in Reuters.