(Yicai) Sept. 5 -- Star CM Holdings, the producer of television talent show The Voice of China, said it will take legal action over what it says was a fabricated and untrue rumor about an incident involving the late pop diva Coco Lee. The firm’s stock has plunged 80 percent since Aug. 11.

An investigation into the rumor that was spread on the internet and by the media is ongoing and Star CM has instructed a law firm, the Shanghai-based company said yesterday.

On Aug. 17, The Voice of China’s production team said some media accounts “have recently spread the maliciously edited recording” of a misunderstanding with Hong Kong-born Lee, who died aged 48 on July 5, an issue that had been cleared up at the time.

The statement came in the wake of a viral audio clip in which the speaker, thought to be Lee, said she was unfairly treated during her time as a mentor on the popular TV show.

HKD10 billion (USD1.3 billion) was wiped off Star CM's market value on Aug. 18, the first day of trading after the rumor went viral. Its shares [HKG: 6698] ended 0.6 percent higher at HKD24.65 (USD3.15) each in Hong Kong today.

On Aug. 25, Zhejiang Satellite Television suspended The Voice of China to launch an investigation, as requested by viewers and netizens. On the same day, Star CM said it fully supported the decision and, along with relevant production team members, would actively cooperate with the investigation.

Star CM is China's largest intellectual property creator and operator of variety shows. The Voice of China, the company's biggest such show, first aired in July 2012.

Editor: Martin Kadiev