Financial fraud, market manipulation, and bribery of these pharmaceutical company bosses have beaten the cards in their hands.

Seeing him rising from a tall building, seeing him banqueting guests, seeing his building collapsed

Whether it is Ma Xingtian of Kangmei or Zhang Meihua of Tongjitang, whether it is Liu Qun of Tiansheng Pharmaceuticals or Liu Lingan of Hansen Pharmaceuticals, they have relied on their personal vision and courage to start their own businesses, and they have put their companies on the capital market and rewritten their lives.

On October 26, *ST Tongjitang issued an announcement stating that the company may be forced to delist

Also on October 26, Hansen Pharmaceutical issued an announcement stating that Chairman Liu Lingan was investigated by the Securities Regulatory Commission for suspected manipulation of the securities market

Business leaders who were once brilliant, touched the legal red line, and at the same time pushed the company they built and the hard work of their lives into the abyss

There are four red lines that listed companies must adhere to.

01.

Kangmei Pharmaceutical Co.

Under the leadership of Ma Xingtian, *ST Kangmei Pharmaceutical was listed on the Shanghai Stock Exchange in March 2001.

In December 2018, the China Securities Regulatory Commission began an investigation into *ST Kangmei Pharmaceutical, which uncovered the largest financial fraud case in the history of A-shares

Same era when Ma Xingtian founded Kangmei Pharmaceutical

Zhang Meihua went to Japan to study in 1991 and received a PhD in Macroeconomics in 1994

Zhang Meihua used five years to make the number of Tongjitang branches soar to 3,000, and became the leading enterprise in China's chain drugstores in one fell swoop

But these just look beautiful

An investigation by the China Securities Regulatory Commission showed that since the completion of the reorganization and listing in 2016, *ST Tongjitang began operations such as inflating revenue

In terms of business, *ST Tongjitang’s net profit was actually negative from 2017 to 2019.
In 2020, it suffered a huge loss of 2.
3 billion yuan.
The net profit has been negative for four consecutive years.
*ST Jitang is on the verge of delisting.

.

According to the 2021 semi-annual report, the revenue of *ST Tongjitang in the first half of the year was 373 million yuan and the net loss was 64.
77 million yuan
.
The total debt is 2.
7 billion yuan, but only 74.
13 million yuan is left in monetary funds
.

In addition to false records, inflated operating income, operating costs, sales and management expenses, *ST Tongjitang also failed to promptly disclose related transactions involving non-operating capital occupation by the controlling shareholder and its related parties in the 2016-2019 annual report.
, Failed to truthfully disclose the company’s deposit and actual use of raised funds
.

The Securities Regulatory Commission decided to order *ST Tongjitang to make corrections, give a warning, and impose a fine of 3 million yuan; give a warning to Zhang Meihua and Li Qing, and impose a combined fine of 5 million yuan, and ban them from entering the market for life
.
However, the Tongjitang, which he founded alone, may be subject to major violations of forced delisting of the company's stocks due to major violations of compulsory delisting
.

*ST Kangmei is still working hard to change the ending of the story
.
On October 29, *ST Kangmei reported a substantial step towards actively resolving debt risks
.
On the evening of October 29, the company announced the progress of risk mitigation: First, the major shareholder repaid the share of 1.
64 billion yuan; second, in the investor’s equity adjustment plan, the restructuring investor plans to subscribe for the major shareholder’s conversion stock with 6 billion yuan.
Solve the problem of account balance; thirdly, the second creditors meeting and investor group meeting will be held on November 15.
If the reorganization work goes on smoothly, it is expected that debt risks and delisting risks will be resolved within the year
.

02.
Suspected of manipulating the securities market: Hansen Pharmaceutical Liu Lingan under investigation

On October 26, Hansen Pharmaceutical, another Chinese medicine company, issued an announcement stating that its chairman Liu Lingan was investigated by the China Securities Regulatory Commission for suspected manipulation of the securities market
.

Liu Ling'an of Hansen Pharmaceuticals is not only from a professional background, but also quite famous in society
.
It is understood that in 1983, Liu Ling Ann graduated from Hunan Medical College Pharmacy 30 classes, served as the Hunan Provincial Health Department directly under the Provincial Pharmaceutical (Group) Development Corporation manager, manager of the company in Hainan, Hainan Medical Equipment Co.
, Ltd.
Chairman of the Board
.
According to Tianyan Check, in addition to Hansen Pharmaceutical, Liu Ling'an also holds a controlling stake in a number of companies including Nanyue Pharmaceutical, and concurrently serves as the chairman of the Hunan Pharmaceutical Industry Association and other social positions
.

In 1999, Liu Lingan raised funds to acquire Yiyang Pharmaceutical Factory (renamed Hansen Pharmaceutical in 2000), which was on the verge of bankruptcy, and obtained the exclusive product Simotang Oral Liquid
.
After the acquisition, Liu Lingan continued to strengthen and expand Hansen, successfully attracting investment from Fosun Pharma, and sent Hansen Pharmaceutical to the market in May 2010
.
At the time of listing, Hansen Pharmaceutical had a total market value of approximately 2.
65 billion yuan, making it the first listed company in Yiyang City
.

In the first half of 2021, the company achieved operating income of 443 million yuan, a year-on-year increase of 42.
14%; realized a net profit of 70,635,900 yuan, a year-on-year increase of 32.
7%
.
Hansen Simo Tang accounts for more than half of Hansen Pharmaceutical's total revenue
.

Hansen Pharmaceutical has repeatedly been exposed to violations
.
In August of this year, Liu Lingan was held accountable by the Hunan Securities Regulatory Bureau for the issue of pre-payment of sales expenses that affected the net profit of the listed company
.
According to disclosures, Liu Lingan used personal account transfers to advance sales expenses on behalf of Yunnan Yongzitang Pharmaceutical Co.
, Ltd.
, a wholly-owned subsidiary of Hansen Pharmaceuticals, from 2017 to 2019
.
The total impact of the payment on behalf of the company on the company's net profit from 2017 to 2019 is about 15.
64 million yuan
.

In March 2017, the Hunan Securities Regulatory Bureau issued a notice stating that Hansen Pharmaceutical’s controlling shareholder, Xinjiang Hansen, did not disclose in time when the holding of Hansen Pharmaceutical’s shares reached 5%, and did not stop the reduction.
The cumulative reduction of Hansen Pharmaceutical’s shares was approximately 2929.
Ten thousand shares, accounting for 9.
9% of Hansen Pharmaceutical’s total share capital, this behavior violated the Securities Law
.
In addition, Xinjiang Hansen was also subjected to administrative supervision measures by the Hunan Securities Regulatory Bureau to issue a warning letter in 2015 for illegally reducing its holdings of Chutian Technology
.

After another illegal shareholding reduction in 2017, the Hunan Securities Regulatory Bureau took administrative supervision measures such as supervisory talks and recorded them in the integrity files of the China Securities Regulatory Commission
.

03.
Bribery, production and sales of counterfeit drugs: ST Tianshengyuan Chairman Liu Qun is behind bars

Liu Qun, chairman of ST Tianshengyuan, was also a man in Chongqing
.

Tiansheng was established in October 2001 and listed on the A-share market on May 19, 2017
.
At the beginning of its listing, Tiansheng’s initial IPO price was 22.
37 yuan per share, which raised a total of 1.
078 billion yuan.
It was the company with the largest IPO fundraising in Chongqing at that time
.

In the three years before listing, Tiansheng’s performance has grown rapidly.
In 2014, 2015, and 2016, it achieved net profits of 151 million yuan, 165 million yuan, and 206 million yuan after non-deduction, respectively
.

However, less than a year after listing, the heads of several major customers of Tiansheng have been investigated by the Commission for Discipline Inspection.
Four executives of the company, including the former chairman Liu Qun, have also been involved in bribery, production and sales of counterfeit drugs
.
Tiansheng began to fall into the quagmire
.

It is reported that from 2003 to the beginning of 2018, Liu Qun, who was the legal representative and actual controller of Tiansheng Pharmaceuticals at the time, sought illegitimate benefits for Tiansheng Pharmaceuticals and its affiliates that he actually controlled, and gave a total of approximately 14.
75 million property to a number of state workers.
Yuan, of which Liu Qun, on behalf of Tiansheng Pharmaceutical, gave a total of about 9.
7 million yuan to national staff
.

According to the first-instance judgment in March 2020, Liu Qun, the former "Top Ten Chongqing Merchants", was accused of bribery, bribery, embezzlement, embezzlement of funds, and false litigation, and was fined 2 million yuan.
, Confiscated 8 million yuan of property, and will face 19 years in prison
.

Under the fierce turmoil, Tiansheng was subject to the special treatment of “delisting risk warning” on April 29, 2019, and it was directly reduced from “Tiansheng Pharmaceutical” to “*ST Tiansheng”
.

In order to survive, in February 2020, ST Tiansheng initiated a major asset reorganization and transferred part of the equity of some pharmaceutical commercial companies directly or indirectly held to Chongqing Pharmaceuticals
.
This move caused ST Tiansheng to divest its main business pharmaceutical circulation business into an empty shell
.
On October 15th, ST Tiansheng announced that it is expected to lose 24 million to 33 million yuan in the third quarter, and the net profit loss in the first three quarters of 2021 will reach 64.
5 million to 73.
5 million yuan
.

On October 18, ST Tiansheng issued an announcement stating that the fourth time was extended for the appeal case concerning the company’s crimes of bribery by the company and by the controlling shareholder Liu Qun for bribery by the company, the crime of bribery against the company, the crime of embezzlement by office, and the crime of embezzlement of funds.
The trial period is three months
.