Sixteen suspects -- including Shu Yuhui, the actual controller of Quanjian Nature Medicine Technology Development Co -- have been approved for arrest by Tianjin prosecutors on Sunday.
The Tianjin City Wuqing District People's Procuratorate gave the arrest decision after examining evidence materials provided by investigators, showing the suspects were in connection with organizing and leading an alleged pyramid scheme.
Shu, 51, is also the chairman and founder of Tianjin-based drugmaker Quanjian Nature Medicine Technology Development Co.
Tianjin public security authorities launched an investigation on Jan 1 into Quanjian's use of an alleged pyramid scheme and false advertising of a purported anti-cancer drug.
The case first drew public attention on Dec 25, when a healthcare information sharing platform, Dingxiang Doctor, claimed in an article that the company made huge profits by misleading consumers.
The article cited Zhou Erli, who said his 7-year-old daughter, Zhou Yang, died in December 2015, after taking medicine from Quanjian that claimed to have an anti-cancer effect.
Zhou lost his first lawsuit in 2015 shortly before his daughter died. A court dismissed his claim that the company had misled the family over the potency of its anti-cancer treatment and spread false information.