Earlier today, in a Hong Kong Stock Exchange (HKSE) filing, China Modern Dairy acknowledged reports that "several" of 94 cows sold at auction by its subsidiary, Modern Farming (Baoji Farm), had tested positive for bTB.
A "small number" of the milk cows sold also reportedly tested positive for brucellosis, said the HKSE filing.
The Chinese government has in response to the unconfirmed reports already initiated a probe.
"In relation to the articles, the company is aware that the relevant government authority is currently investigating in this incident," said China Modern Dairy in its HKSE filing.
"The company has fully cooperated with the relevant government authority on such investigation by providing all the relevant information and records as required."
No recall
bTB is a zoonotic disease caused by mycobacterium bovis. Similarly, brucellosis is caused by a bacteria called brucella.
Humans can become infected with both bTB and brucellosis through the consumption of unpasteurized milk from an infected cow.
Pasteurization is, however, sufficient to kill both types of bacteria.
As a consequence, China Modern Dairy, which is the country's largest producer of raw milk and supplies the likes of Mengniu, will not be required to recall any products from the market, Bloomberg reported today.
On news of the Chinese government investigation, however, the price of China Modern Dairy shares today plummeted.
At close of trading in Hong Kong today, China Modern Dairy shares were down 8.5% at HK$2.80.