China-based Hainan Poly Pharm Co., Ltd (SHE: 300630) was imposed strict administrative penalties by the China Securities Regulatory Commission (CSRC) last week. This action has triggered a delisting process by the Shenzhen Stock Exchange. The penalties were imposed after significant false records were discovered in Poly Pharm’s 2021 and 2022 annual reports. The company was found to have inflated profits by over RMB 500 million (USD 69 million) for two consecutive years, accounting for more than 50% of the total.
Company Background
Founded in 1992, Hainan Poly Pharm is a leading injectables manufacturer in China. The company’s product portfolio includes antibiotics, anti-allergic drugs, nonsteroidal anti-inflammatory drugs, and other pharmaceutical products. Its main product, the desloratadine franchise, once achieved a market share exceeding 70% in China, highlighting its significant presence in the domestic pharmaceutical market.
Impact and Implications
The administrative penalties and delisting process mark a critical moment for Hainan Poly Pharm. The company’s financial misconduct has not only led to severe regulatory consequences but also raises concerns about corporate governance and transparency in the Chinese pharmaceutical sector. Investors and stakeholders will be closely monitoring the company’s next steps as it navigates this challenging period.-Fineline Info & Tech
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