Chinese food processing firm People's Food has issued the Singapore stock exchange with a denial that there is any disease in its plants, after market talk triggered a sharp fall in its shares.

"With reference to market rumours about outbreaks in the People's Republic of China of Hand, Food and Mouth disease and the bird flu virus affecting its operations, the board would like to state that the operations of the group have not been affected by the aforesaid diseases," it told the exchange.

"The board will however continue to closely monitor the situation and make the necessary announcements should there be any developments," it said. "The board would also like to highlight that as part of the group's normal course of business, its management constantly monitors reports of viral outbreaks in the PRC. Furthermore, as the group's production facilities are located all over the PRC the management is able to quickly respond to such outbreaks if needed, by isolating and quarantining its facility in an affected area, with minimal or no impact on the other remaining facitilities."

The announcement was in response to a query from the exchange after the fall in People's Food shares in heavy trading. According to the Reuters news agency the shares fell to a two year low.