(Yicai Global) April 16 -- Yonghui Superstores apologized after checks found substandard food at the Chinese supermarket chain, prompting a slump in its share price.

Yonghui will fully inspect its food safety procedures and will tighten management, the Fujian-based firm said in a statement late yesterday. It also vowed to beef up oversight of its suppliers and do thorough checks on products, especially of fresh produce.

A total of 15 food samples taken from Yonghui outlets were found to be subpar in the first quarter, media reports said on April 8, citing Fujian province’s market regulator. Eight samples were of aquatic products.

Shares in Yonghui Superstores [SHA:601933] slumped from CNY6.75 (USD1.03) to a low of CNY6.32 after the reports. The stock closed at CNY6.38 today, a drop of 0.8 percent.

The company’s initial reaction to the reports was combative. “Yonghui Superstores inspects more than 3,000 batches of goods every day and 15 among nearly 300,000 batches in a quarter are substandard,” Board Secretary Zhang Jingyi said on April 12. “Can you regard that as ‘a lot’?”

The Shanghai Stock Exchange wrote to the company yesterday, asking it to respond to public concerns.

Founded in 2001, Yonghui’s largest shareholder is Dairy Farm International Holdings, a unit of the UK’s Jardine Matheson Holdings, with a 20.1 percent stake as of Sept. 30. Founder and Chairman Zhang Xuansong and his brother Zhang Xuanning own 14.79 and 7.82 percent, respectively, while internet giant Tencent Holdings owns 5.03 percent.

Editor: Tom Litting