Dive Summary:
- Yum! Brands, including KFC, Pizza Hut and Taco Bell, is facing a class action lawsuit in California based upon several inconsistencies with their business in China.
- Apparently, the company was aware of high levels of antibiotics and other drugs in chickens from the Shandong Luihe group, but continued selling them.
- Also, Yum! Brands allegedly misinformed investors and regulators of the effects of a slowing Chinese economy, calling their earnings predictions into question.
From the article:
Yum! Brands misrepresented the effects of slowing economic trends in China while predicting increased earnings-per-share growth,
Yum! Brands was aware of the results of food safety inspections showing high levels of antibiotics and other drugs in chickens from the Shandong Luihe group
The company continued to buy contaminated chickens until as late as August 2012.
