Shenzhen Stock Exchange To Delist Changsheng Biotech Over Vaccine Data Scandal
For faking its own vaccine data, Chinese biopharmaceutical firm Changsheng Biotechnology will be removed from the Shenzhen Stock Exchange. The bourse announced on Tuesday that it will be delisting the company over the "major" breach.
Changsheng Biotechnology's illegal practice was first uncovered last year and had rocked China's drug industry. Several investigations into the company's practices were launched following the revelation. The scandal resulted in the Jilin-based company to losing more than 95 percent of its market value in the months that followed
According to the Shenzhen bourse, it will be giving Changsheng a final 30 days for its stock to continue trading prior to completely erasing it from the exchange's mainboard. The company will officially be removed from the board on November 26. The 30 days of trading will likely not do the company any good given that its value has already dropped to less than 1.51 yuan per share.
The biotech firm is the first company to be booted off the exchange following the imposition of stronger delisting rules. The Shenzhen bourse imposed the new rules last year and included endangering "public safety, health, and national security" as part of the delisting criteria.
Under its revised rules, Changsheng had met the criteria for delisting by endangering the public's safety with its faked vaccine data. Changsheng's illegal practices were first uncovered in July last year. The company was found to have falsified the production and inspection data for its vaccines for rabies, diphtheria, whooping cough, and tetanus.
Due to the scale of the scandal, Chinese President Xi Jinping even stepped in and called for a thorough investigation into the company's practices.
The ensuing investigation resulted in the arrest of 18 people, including the company's chairwoman Gao Junfang. Gao held an 18.1 percent stake in the company, making her its biggest shareholder. Prior to the scandal, Changsheng was the country's second-largest vaccine maker.
The company was also fined $1.27 billion by regulators as a result of its falsification of data. China also barred any of the company's shareholders to sell their shares of the company during the investigations.
No exact information is available for the company's finances for this year. The company has not released any of its financial results since the start of the year as all of its assets and bank accounts were frozen by regulators. Its last report was for its revenues for the first half of 2018. During its first half last year, the company reported a net income of $35.45 million.