China. Former pharmaceutical company president Kangmei sentenced to 12 years for corruption

Ma Xingtian, former chairman of Kangmei Pharmaceutical, was sentenced to 12 years in prison and fined of 1.2 million yuan (US$188,300) for securities market manipulation, non-disclosure of important information and bribery. The Guangdong High People's Court rejected Ma's appeal and issued a final ruling on his case.

The court upheld the tribunal's November verdict, saying the evidence was sufficient, the conviction accurate, and the sentence appropriate. Kangmei, one of China's largest publicly traded pharmaceutical companies with 8,900 employees, was accused of financial reporting fraud involving 88.6 billion yuan of overreporting between 2016 and 2018. Regulators found that the company used fake bank receipts to inflate cash reserves, forged paperwork for non-existent business, and transferred company funds to related parties to trade its own shares.

A novembre, il tribunale di grado inferiore ha ritenuto la casa farmaceutica, i suoi dirigenti e i suoi revisori dei conti responsabili di frode finanziaria che ha causato perdite per 2,46 miliardi di yuan (385 milioni di dollari) a 52.037 investitori. La moglie di Ma, Xu Dongjin – che era l’ex vicepresidente e vicedirettore generale di Kangmei – e cinque direttori indipendenti che hanno firmato i rapporti finanziari di Kangmei durante il periodo della frode – erano tra gli imputati e sono stati ritenuti in parte responsabili del risarcimento. L‘accertamento della responsabilità parziale degli amministratori ha innescato un’ondata di dimissioni da parte di membri esterni del consiglio di una dozzina di società cinesi quotate in borsa.

From 2015 to 2018, Ma and other executives illegally raised a large amount of money and manipulated Kangmei's share price and trading volume by using multiple trading accounts under his control to buy and sell shares, the court. But he also organized, planned and directed the company's personnel to conduct financial fraud, disclose false business information to shareholders and the public, and fail to disclose more than 11.6 billion yuan of non-operating funds that were embezzled by controlling shareholders and related parties.

From 2005 to 2012, Ma paid bribes totaling $1.1 million to a number of government officials in exchange for benefits for the company, the court said. At least five officials involved in Ma's corruption case have already been removed from their positions and punished, including the former Communist Party secretary of Guangzhou city and the former head of the investor protection bureau at China Securities. Regulatory Commission.

Kangmei's losses in 2020 reached 27.7 billion yuan, nearly five times from a loss of 4.7 billion yuan a year earlier. In April, a creditor of Kangmei filed a bankruptcy restructuring lawsuit for the company, accusing Kangmei of failing to repay 49 million yuan. Last month, state-owned Guangzhou Pharmaceutical Holdings agreed to invest up to 6.5 billion yuan in a government-led Kangmei bailout.

Nikkei Asia – January 11, 2022