Ackman takes aim at Herbalife for China dealings

A pedestrian walks past an advertisement for Herbalife products endorsed by Argentine football superstar Lionel Messi in Beijing, China, 10 March 2012.
Imaginechina | AP

Hedge fund manager Bill Ackman renewed his attack on Herbalife, saying Tuesday that it operates a pyramid scheme in China in violation of local rules—just like he has long claimed about the nutritional supplement company's practices in the U.S. and around the world.

"Herbalife is violating the direct-selling and pyramid laws and criminal law in China," David Klafter, Pershing Square Capital Management's senior counsel, said during a more than two-hour webcast for about 300 observers, including journalists, analysts and others.

The price of Herbalife shares drifted lower Tuesday but rose initially during the presentation, apparently in response to traders largely dismissing the revaluations in the presentation.