(Yicai) July 21 -- Jiangsu Sinopep-Allsino Biopharmaceutical, a leading Chinese supplier of active pharmaceutical ingredients for drugs that are used to treat type-2 diabetes and obesity, has been fined CNY47.4 million (USD6.6 million) by China’s securities regulator for falsifying its financial results, and has been slapped with a delisting warning, putting its future on the Shanghai Stock Exchange in doubt.

Sinopep-Allsino’s shares [SHA: 688076] were suspended from trading on the Shanghai bourse’s Star Market today after receiving the delisting warning and are expected to resume trading tomorrow.

Sinopep-Allsino has been found by regulators to have inflated its annual business revenue by CNY30 million (USD4.2 million) in December 2021, and to have faked its profits by CNY26 million, which accounted for 20.6 percent of the company’s total profit that year, the firm said on July 18, citing the notice it received from the China Securities Regulatory Commission that it would be issued with administrative penalties.

Sinopep-Allsino cooked the books to meet the financial requirements needed to pursue a refinancing plan, the regulator said. Thanks to the fabricated numbers, the Lianyungang-based company successfully secured regulatory approval to issue convertible bonds and raised CNY434 million (USD60 million) in December 2023.

The CSRC fined Sinopep-Allsino CNY47.4 million (USD6.6 million) for false information disclosure and fabricating key content in public filings. It also fined Zhao Dezhong, the actual controller of the firm, CNY18 million, and several other senior executives involved in the scandal received fines ranging from CNY1.5 million (USD209,000) to CNY3.3 million.

Sinopep-Allsino, which specializes in the research and development of peptide and small molecule drugs, went public on the Star Market in May 2021. The company is a key supplier of APIs for weight-loss drugs and GLP-1 receptor agonists, such as semaglutide and liraglutide. Its products are part of the global supply chain for pharma giants such as Denmark’s Novo Nordisk and the US’ Eli Lilly and Company, and it has already achieved commercial-scale supply deals.

Sinopep-Allsino’s share price surged over 70 percent in the first half of last year when it became API supplier to several international weight-loss drug titans. However, after the CSRC announced its probe into the alleged financial fraud in October 2024, the stock plunged nearly 30 percent in value that month and has been volatile ever since.

Under China’s stock market rules, companies that receive a delisting risk warning must complete corporate governance and financial data rectifications as per the regulator’s requests and resolve any civil lawsuits stemming from the case within 12 months to avoid being forcibly delisted.

Editors: Tang Shihua, Kim Taylor