Tongjitang, whose inflated income exceeds 20 billion, will be delisted and delisted. Many pharmaceutical companies have been involved in financial fraud.
Tongjitang, whose revenue once broke through the 10 billion mark, has made rich achievements for three consecutive years, and its revenue alone has increased by 20.735 billion yuan. Different from the reorganization of Kangmei Pharmaceutical after financial fraud, tongjitang will terminate its listing and delist on July 7. By the close of July 4th, tongjitang’s share price had fallen to 0.27 yuan/share.
Tongjitang’s accumulated inflated income in three years exceeded 20 billion yuan.
Tongjitang specializes in pharmaceuticals, health products and medical devices, and its clients include medical institutions, wholesale enterprises and retail pharmacies. In 2016, tongjitang entered the A-share market by means of major asset restructuring.
After landing on the A-share market, tongjitang’s performance was "good", with revenue and net profit rising three times in a row from 2016 to 2018. In 2018, revenue exceeded 10 billion, reaching 10.842 billion yuan. According to the gambling agreement with hops, tongjitang has "accurately completed" the gambling target in the past three years. After the gambling agreement passed regularly, tongjitang’s performance also fell sharply. In 2019, its revenue fell to 4.5 billion yuan, and its net profit fell to 122 million yuan. In that year, the annual report was even audited by an accounting firm. On April 27th, 2020, China Securities Regulatory Commission officially launched an investigation on tongjitang. On July 1st, 2020, tongjitang stock was warned of delisting risk, and its name was changed to *ST Jitang.
According to the investigation results of China Securities Regulatory Commission, from 2016 to 2018, tongjitang inflated its accumulated income by 20.735 billion yuan, inflated its costs by 17.851 billion yuan and inflated its total profits by means of fictitious sales and procurement business of three subsidiaries, inflated its sales and management expenses and forged bank receipts.
In 2019, tongjitang once again inflated its operating income by 386 million yuan through fictitious business, inflated its total profit by 386 million yuan, and inflated its net profit by 299 million yuan, accounting for 226.52% of the net profit disclosed in the 2019 annual report. Daxin Certified Public Accountants (special general partnership) issued an audit report on tongjitang’s 2019 annual report that could not express opinions.
After retrospective adjustment, tongjitang’s net profit was negative for four consecutive years from 2017 to 2020. Among them, in 2020, the net profit attributable to shareholders of listed companies was-2.262 billion yuan, a year-on-year decline of 2403.1%. The performance forecast for 2021 shows that tongjitang’s main business income is expected to be only 720 million yuan, and its net profit is-141 million yuan to-212 million yuan. Due to the failure to disclose the 2021 annual report on schedule, in May this year, the China Securities Regulatory Commission filed an investigation against tongjitang.
In addition, from January 2016 to December 2019, tongjitang directly or indirectly provided the controlling shareholder Hubei tongjitang Investment Holding Co., Ltd. and its related parties with a total of 2.592 billion yuan of non-operating funds through a number of companies without going through the review procedure. The annual report did not disclose the related transactions of the above-mentioned non-operating funds, nor did it truthfully disclose the deposit and actual use of the funds raised by the company, illegal guarantees and lawsuits.
At the end of April this year, Chairman and Secretary of the Board of Directors Zhang Meihua of tongjitang, General Manager and Mrs. Li Qing of Zhang Meihua, Deputy General Manager and Chief Financial Officer Wei Jun Qiao resigned at the same time. Just this month, tongjitang received an administrative penalty decision and a market entry decision from the China Securities Regulatory Commission. In response to the above-mentioned illegal incidents, the China Securities Regulatory Commission ordered tongjitang to make corrections, gave a warning and imposed a fine of 3 million yuan; Give warning to Zhang Meihua and Li Qing, impose a combined fine of 5 million yuan, and take lifelong market entry measures; Wei Jun Bridge was given a warning, fined 1 million yuan and banned from the market for 10 years.
In recent years, many listed pharmaceutical companies have been involved in financial fraud.
In recent years, many pharmaceutical companies, such as Kangmei Pharmaceutical, Furen Pharmaceutical, Yan ‘an Bikang, (), Qian Shan Pharmaceutical Machinery, etc., have been exposed to financial fraud.
Among them, the financial fraud incident of Kangmei Pharmaceutical is called the biggest financial fraud case of A shares. According to the investigation results of the CSRC, from 2016 to 2018, Kangmei Pharmaceutical inflated its operating income by 29.128 billion yuan, inflated its operating profit by 4.101 billion yuan, and accrued interest income by 510 million yuan. In the same period, Kangmei Pharmaceutical also inflated monetary funds by 88.68 billion yuan. Ma Xingtian, the former chairman, was punished for several crimes, and was sentenced to 12 years in the first instance and fined 1.2 million yuan; Kangmei Pharmaceutical Co., Ltd. was fined 5 million yuan for bribery, and 11 former vice-chairman and executive deputy general manager Xu Dongjin and other responsible persons were sentenced to fixed-term imprisonment and fined respectively for participating in related securities crimes.
The former medical white horse stock did not withdraw from the market after it fell to the altar. On June 4, 2021, Kangmei Pharmaceutical was ruled to be reorganized. Guangdong Shennong Enterprise Management Partnership (Limited Partnership), composed of GPHL and Guangdong Yuecai, invested 5.4 billion yuan to become the largest shareholder of Kangmei Pharmaceutical, and GPHL took the opportunity to enter Kangmei Pharmaceutical. On May 20th this year, Kangmei Pharmaceutical cancelled relevant risk warnings and continued to be implemented with other risk warnings. The stock abbreviation was changed from "()" to "ST Kangmei".
Furen Pharmaceutical, which once had a market value of 10 billion yuan, was caused by financial fraud due to the cool dividend in 2019. The survey results show that there are false records and major omissions in the annual reports of Furen Pharmaceutical in 2015, 2016, 2017 and 2018; There are false records in the major asset restructuring documents released in 2016; In 2018, the related guarantee was not disclosed in time; Its controlling shareholder, Fu Jen Group, provided false information in major asset restructuring and other four major credit approval violations. Although Furen Pharmaceutical eliminated the delisting risk warning in 2021, the stock name "Pixing" was once again on the verge of delisting because the 2021 annual report was not disclosed on time, and several delisting warnings were issued continuously.
Yan’ an Bikang was found out that from 2015 to 2018, the non-operating occupation of listed company funds by controlling shareholders and their related parties reached 4.497 billion yuan, which was not disclosed in the annual report. In addition, Yan ‘an Bikang concealed the above-mentioned related parties’ non-operating occupation of listed companies’ funds by means of false accounting and forgery of bank statements, which led to the inconsistency of the monetary funds disclosed in the relevant annual reports of listed companies and the existence of inflated monetary funds. Among them, the inflated monetary fund in the 2015 annual report exceeded 794 million yuan, the inflated monetary fund in 2016 exceeded 2.057 billion yuan, and the inflated monetary fund in 2018 was about 812 million yuan. Due to the audit conclusion that the 2021 annual report was "unable to express opinions", the name of Yan ‘an Bikang stock was directly changed to "()" on July 1 this year.
Beijing News reporter Wang Kara
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