Shanghai Fashion was subcontracted by Ascendo Industrial, a factory and distributor based in KwaZuluNatal province, in South Africa. Ascendo is owned by African National Congress MP ShiaanBin Huang and his wife, SuLuan. It was contracted to produce 100,000 figurines of the leopard mascot, according to British newspaper The Times.

Huang expected the suspension to be lifted as early as next week and manufacturing to be resumed.

"There is no big issue. There was an inspection. But when the media reports began, the factory began paying its workers more and changing, so I think by next week they will be making the figurines again," he told The Times.

Chen denounced the allegation that their workers are underpaid as baseless, saying that the company would attract no workers if it paid less than average, since China is currently suffering from a severe labor shortage.

As the economic recovery has gained momentum, and especially since the beginning of the Chinese New Year last month, there has been a lack of labor in the Yangtze River Delta, home to a number of laborintensive enterprises.

Chen also denied that the company has employed children, saying it has issued a legal letter to News of the World and demanded it stop infringing on its rights and remove the report.

"The factory checks every worker's ID card when they are hired, and the company carries out all procedures stipulated by the current law," she said.

Henry Li, spokesperson for Intertek, an international organization authorized by GBG to visit the factory and conduct an ethical and social compliance audit of its operations, declined to disclose the outcome of the audit.

GBG spokesman Paul Zacks told The Times earlier that an audit identified a number of areas of noncompliance with GBG's policies.

"A corrective action plan has been put together with the manufacturer to close the gaps and make necessary improvements," he said.

Chen said the factory would fully cooperate with the investigation and make improvements on any problems.

"So far, the incompliance discovered is only limited to arbitrary placement of fire extinguishers and other equipment," she said.

Chen suggested that the incident was incited by the widespread resentment about high unemployment in South Africa, which was said to have reached 25 percent.

Her company has fallen victim to political struggle and protectionism in South Africa, she said.

The ruling party in South Africa is facing increasing pressure from its citizens who demand the government curb high unemployment.