FILE PHOTO: A security camera is pictured at the kindergarten run by pre-school operator RYB Education Inc being investigated by China's police, in Beijing, China November 24, 2017. REUTERS/Jason Lee

SHANGHAI (Reuters) - Chinese police said late on Tuesday some claims of child abuse at a Beijing kindergarten run by New York-listed RYB Education were unfounded, the latest twist in a case that has sparked outrage throughout China.

RYB’s shares plunged 38.4 percent last Friday after police launched an investigation into allegations of child abuse at the school, though they have recovered some losses this week. By 1700 GMT, the shares were up around 16.6 percent.

Police in Beijing’s Chaoyang district said in a statement posted on their official microblog late on Tuesday that they had criminally detained a teacher surnamed Liu suspected of using knitting needles to discipline children.

However, they added that claims made by some parents that children had been fed unidentified tablets at the school and accounts of a naked adult male conducting purported “medical check-ups” on unclothed students were fabricated.

China’s state-run Xinhua news agency had reported last week that police were checking allegations that children were “reportedly sexually molested, pierced by needles and given unidentified pills”.

The Chaoyang police added they had recovered 113 hours of footage from the school’s surveillance system, but had not yet found on it instances of people harming children. They added that the hard drive storage for the footage had been “damaged”.

The fall-out from the scandal has been widespread. China’s education ministry has launched a special investigation into kindergartens nationwide, while Beijing authorities have said they will send permanent inspectors to city nurseries.

RYB, which says it has over 1,300 play-and-learn centers and nearly 500 kindergartens in around 300 cities in China, has suspended one teacher and fired the headmaster of the Beijing kindergarten.

The Chaoyang police said it would continue with its investigation to get to the bottom of the child abuse claims and hand out severe punishments according to the law.