Kao’s Kanebo continued shipping skin-whitening cosmetics even after its top managers endorsed a decision to recall the products following consumer complaints of white blotches

Kanebo shipped cosmetics after recall decision

KYODO

SEP 3, 2013

Kanebo Cosmetics Inc. continued shipping skin-whitening cosmetics even after its top managers endorsed a decision to recall the products following consumer complaints of white blotches, sources said. The subsidiary of Kao Corp. delayed halting shipments for almost a week through July 4, when the company announced the recall, a delay that increased the number of people affected, the sources said Monday. Cosmetics retailers were alerted to the recall only on the day of its announcement.Kanebo came under fire for its slow response to a dermatologist’s alert in May regarding the blotch problem.

An official of Kanebo’s public relations department acknowledged delaying the halt in shipments. “We feared that if we had stopped shipments, it would have triggered a commotion as information (on the blotches) would leak prematurely and we needed time to establish contact points” for affected consumers, the PR official said.

A senior Consumer Affairs Agency official said the company’s response was tantamount to “relegating consumers’ interests to the back burner.”

On July 4, Kanebo announced the recall of 54 different skin-whiteners. The firm had marketed 4.36 million units, of which 1.25 million were recalled as of Aug. 25. The recall included thousands of products across Asia.

The firm has confirmed that 8,678 users suffered the blotchy problem as of Aug. 25.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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