(Corrects name in paragraphs 2 and 12 to Zhang not Shuhong) (Adds Mattel comment, ninth paragraph)

BEIJING, Aug 13 (Reuters) - The boss of a Chinese toy manufacturing company involved in a Mattel recall after its products were found to contain excessive lead levels has hanged himself, Chinese media reported on Monday.

Zhang Shuhong, a Hong Kong businessman in his 50s and boss of the Lida Toy Company in the southern province of Guangdong, was found dead in his factory workshop on Saturday, the semi-official Southern Metropolitan Daily said.

Zhang was not a Mattel employee.

About 1.5 million preschool toys made by Lida Toy, a Foshan-based contract manufacturer for Mattel Inc.'s Fisher-Price unit, were recalled across the globe by the U.S. company last week.

The recalled toys included popular preschool characters such as Elmo and Big Bird and dozens of other items. The case was the latest in a deluge of product safety scares that have tainted the "made-in-China" brand.

The recall was Mattel's largest since 1998 when it recalled some 10 million Power Wheels vehicles made by its Fisher-Price unit.

The latest recall comes on the heels of RC2 Corp's <RCRC.O> Chinese-made wooden Thomas & Friends toy trains in June because some of them contained lead paint.

Lead paint has been linked to health problems in children, including brain damage. China's quality watchdog had banned Lida from exports.

A close friend of Zhang who was also one of the major paint suppliers for the company sold the problematic paint to Lida, the newspaper said.

"(He) was so evil-hearted to have sold the fake paint to our boss ... our boss was ruined by his best friend," a manager of the company, surname Liu, was quoted as saying.

Lida was not immediately available for comment. Calls to its factory went unanswered.

Mattel spokeswoman Jules Andres said the company was "saddened" to hear of Zhang's death, but had no further comment.

Police were investigating the case, the newspaper said.

Chinese goods have been under fire after a chemical additive in pet food caused the death of some pets in the United States, and toxic ingredients were found in Chinese toothpaste and fish exports.

Deaths of patients in Panama were blamed on improperly labeled Chinese chemicals mixed into cough syrup. (Reporting by Vivi Lin, additional reporting by Justin Grant in New York)

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