Allegedly forced employees to drink urine when they have failed to meet their targets.
Footage has emerged online purportedly showing the incident, during which staff are so whipped with a belt.
The video, filmed in southwestern China's Guizhou Province on October 30, shows a worker standing in the middle of what appears to be an office meeting.
Then, several employees can each take a cup of liquid and drink it at the front of a power point presentation screen.
According to reports, the nauseating punishments were dealt out by the business leaders when staff failed to meet their sales targets.
Three of the company's managers have been arrested, two of whom were detained for ten days.
The police are continuing to investigate the incident.