The plastic pre-school toys, sold under the Fisher-Price brand in the US, included Big Bird, Elmo, Dora and Diego characters.
The Southern Metropolis newspaper said that a supplier, said to be Zhang's best friend, had sold Lee Der the paint that was used in the toys.
Liu, a manager of the company was quoted as saying: "The boss and the company were harmed by the paint supplier, the closest friend of our boss."'
Liu said Zhang hanged himself on Saturday.
No other details of his death were reported, but police were said to be investigating.