(Yicai Global) Dec. 29 -- A cosmetics business founded by Chinese-Taiwanese actor Kevin Lin and his wife Zhang Ting is under investigation by the market regulator in the northern Chinese city of Shijiazhuang because of suspected pyramid selling.

The market watchdog of Shijiazhuang’s Yuhua district has opened an investigation into Shanghai-based Dowell Trading, which has been owned by Lin and his spouse since June, according to information the regulator made public today.

The watchdog has applied to a court for preservation measures in accordance with the law, since Dowell Trading uses financial institutions to transfer or conceal funds involved in the schemes, it said. The case involves many people and a relatively large sum of money, the regulator added.

Dowell Trading, set up in 2013 with a registered capital of about CNY232 million (USD36.4 million), mainly sells cosmetics and skin care products through an app and offline stores.

Dowell Trading operates legally, Tin’Secret, a cosmetics brand run by the firm, said on Weibo today, in response to the allegations, adding that the company is operating normally and will actively cooperate in the investigation.

Lin and Zhang were both actors. Lin appeared in a series of popular romance dramas in the 1990s, while Zhang starred in many television series because of her sweet appearance. An insider told Yicai Global that Lin has always been very interested in business and often spoke about his ideas on set.

After leaving show business, Lin got into real estate and set up major branches in the cities of Beijing, Suzhou, Nanjing and Nanchang, with total sales area of 9.1 million square meters and total sales of CNY33 billion (USD5.18 billion).

Dowell Trading launched Tin’Secret in 2013, and it developed quickly in subsequent years. In 2018, there were rumors that the company had paid as much as CNY2.1 billion (USD330 million) in annual taxes. But controversy has surrounded the rise of Tin’Secret. It is reported that the company is suspected to use the pyramid scheme model for sales.

Apart from Dowell Trading, Zhang and Lin are jointly associated with 11 other companies, according to a business information platform. Many under Zhang’s name were deregistered this year.

Editor: Peter Thomas