Fake Vaccine Maker's Shares Hit Record-Breaking 31-Day Losing Streak
Chen Juan | Liu Jing
DATE:  Aug 28 2018
/ SOURCE:  Yicai
Fake Vaccine Maker's Shares Hit Record-Breaking 31-Day Losing Streak Fake Vaccine Maker's Shares Hit Record-Breaking 31-Day Losing Streak

(Yicai Global) Aug. 28 -- Shares in Changsheng Bio-technology, the firm at the heart of China's ongoing vaccine scandal, have now hit the limit down for 31 straight trading days to set a new record among companies listed on the Chinese mainland.

Changsheng's stock [SHE:002680] has fallen by 5 or 10 percent every trading day since the State Drug Administration revealed on July 15 that it had revoked the company's Good Manufacturing Practice certificate for rabies vaccines, after a whistleblower informed that the Jilin-based healthcare firm had falsified production data for the freeze-dried inoculations. The shares have lost around 85 percent of their value over that time, leaving the price at a little more than a seventh of what it was on July 13, the last trading day prior to the announcement.

The regular limit down on the Shenzhen bourse is 10 percent, but the exchange hit the firm with a 'special treatment' red flag on July 26, after which point its share price could only decline by 5 percent each day. The label is generally given to companies which have made a loss for two straight years or are running abnormally -- often at risk of delisting. On July 27, the bourse revised forced delisting rules to allow it to dismiss companies which put public health and safety at risk.

On July 18, just three days after the national regulator's statement, the local medicine watchdog concluded a year-long investigation by fining Changsheng CNY3.4 million (USD510,000) for making subpar vaccines to prevent diphtheria, tetanus and pertussis in young children. Since then, police have arrested several executives and courts have closed 34 of the firm's bank accounts.

Zhejiang Tianma Bearing Group was the previous holder of the shameful record, after shares dived by the maximum for 30 consecutive business days when it resumed trading in May. It had suspended share sales in December last year pending an announcement about an asset acquisition, but ran into financial troubles.

Fatal Shot

Things got even worse for Changsheng on Aug. 22, when it announced that it was unable to disclose its 2018 semi-annual report on time. Share trading will be suspended on Sept. 3 if it cannot get its books done by then, and if it fails to complete them early next year it will be forcefully delisted.

Courts are also harping after its actual controller, Zhang Minghao. Judicial authorities froze all of his 174 million shares in the firm -- a stockpile that was worth nearly CNY4.3 billion (USD628 million) a little over six weeks ago but now has a value of just CNY600 million (USD88 million).

Once Zhang regains access to his shares, a court in the southeastern province of Fujian plans to re-freeze 167 million of them.

Editor: James Boynton

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Keywords:   Changsheng Bio-Technology,Vaccines,SCANDAL