Caixin
Caixin Global – Latest China News & Headlines

Home >

ABOUT US

CX Live is Caixin Global's real-time news portal, featuring 24-hour breaking news, short-form analysis, and roundups from business and social media in China.

TRENDING
Huawei Mate 20 X Phone Gets Ahead in 5G License Race
Japanese Investors Can Now Buy Chinese Stocks
China Mobile Unveils Detailed Plans for ‘World’s Largest 5G Network’
LATEST
Chinese Tesla Rival Nio Recalls Nearly 5,000 Cars Over Battery Problems
Huawei Says U.S. Proposal to Restrict Patent Lawsuits Could Hurt Global Innovation
Policy Funneling Credit to Small Businesses Is Costing Small Banks Their Clients
Beijing Powers Down Municipal Electric Vehicle Subsidies
Alibaba Seeks $10 Billion Boost in Hong Kong Second Listing
Delayed Annual Reports by Small Banks Show Deteriorating Profits
China Sets New Rules to Bar Logistics Data War
Huawei Links Up With Youku in Video Push
National Auditor Finds Flaws in Local Debt Reports
Shanxi Province Warns Against Using Search Engines for Gaokao Applications
Hong Kong Anti-Graft Body Arrests Former Bourse Official
Government Asks Victims of P2P Fraud Case to Register for Compensation
Japanese Department Store Giant Pulls Out From China
BGI Genomics to Invest in Qingdao Medical Park
What’s Brewing? Luckin Coffee Vending Machines
Alibaba Aims to Double Global Brands With New English Site
Marubeni Taps China’s Nascent Refrigerated Transport Market With G7 Deal
Former China Merchants Chairman Opens Up About Long Friendship With Late CITIC Leader
China to Issue Sovereign Bonds in Macao For First Time
Micron Resumes Some Huawei Shipments Despite Trump Blacklist
Regulator Finds Kangmei Pharma Fabricated Financial Reports

By Wang Juanjuan and Denise Jia / May 18, 2019 05:08 AM / Finance

Photo: IC Photo

Photo: IC Photo

China’s securities regulator concluded an investigation of one of China’s largest listed drugmakers, finding the company fabricating its financial reports from 2016 to 2018.

Shanghai-listed traditional Chinese medicine supplier Kangmei Pharmaceutical Co. Ltd. used fake bank deposit slips to inflate its cash reserves, forged documents for non-existent business activities, and transferred company funds to related parties to trade in its own stock, the China Securities Regulatory Commission (CSRC) said Friday.

Kangmei’s auditor, GP Certified Public Accountants Co. Ltd., the largest auditing company in Guangdong, was also put under investigation for failure to perform due diligence.

Kangmei disclosed April 30 that it was targeted by regulators on suspicion of false financial reports involving a 29.9 billion yuan ($4.4 billion) overstatement of cash on hand.

But the company’s founder and chairman Ma Xingtian described the overstatement as an “accounting error” as results of loopholes in internal controls and financial management. After correcting the accounts, the company’s net profit in 2016 and 2017 would have been reduced by half.

Kangmei was previously involved in several bribery cases involving government officials. According to court documents released last June, the company bribed Cai Ming, former director of the drug safety supervision department at the Guangdong Province Food and Drug Administration, to the tune of 300,000 yuan from 2014 to 2015.

In February, the company was rattled by default risks on $300 million of bonds. The crisis was eased later after the Guangdong provincial government stepped in.

Share this article
Open WeChat and scan the QR code
Copyright © 2019 Caixin Global Limited. All Rights Reserved.