(Yicai Global) Aug. 31 --A unit ofShanghai Fosun Pharmaceutical Groupthat makes generic drugshas beenchargedwithraw materials fraud and other irregularities. Fosun Pharma is conscious of the seriousness ofthe reportandis conductingstrict on-site investigations to verify the situation, according to its chairman.

If theprobeuncoversirregularities,they will be rigorously followed up on and the subsidiaryseverely sanctioned, Shanghai Securities Newsreported Chen Qiyu as saying today.

An employee ofthe unit,Chongqing Pharmaceutical Research Institute,reported thatitviolated national regulations on drug production and management, revealing that almost none of the company's drugs meet production standards, includingan antipsychotic drug called aripiprazole, shows informationposted onthe website of the localFood and Drug Administration branch in the southwestern Chinese city ofChongqing.

The affiliate cheatedtoobtainagood manufacturing practices certificate for drugs by fabricating production and inspection records andalsopaidbribes to FDAoversightpersonnel, thestafferalso alleged.

In-depth investigation isunderwayintothemattersclaimed in the report, but illegalitiesand disciplinary violationssuch as bribesacceptedby FDA inspectors haveas yetnot beensubstantiated,theChongqing FDA said in its investigation progressreport today.

The personal details the employeeleftare notgenuine, soitis unable tocontactthe whistleblower,theagencyadded.

A wholly ownedsubsidiaryof Fosun is the controlling shareholder ofChongqing Pharmaceutical Research Institute, holding almost 57 percent of its shares. The other investor is Chongqing Medicines Group, according to data fromSuzhou Berta Data Technology'sQixinbaocompany information check app.

Chongqing Chemical &PharmaceuticalHoldings Group holds 75 percent of Chongqing Medicines' shares.

"The company has been informed oftherelevant information, butthe allegations in thereportarefalse," astaffertold local news outletNational Business Daily, which yesterday contacted Chongqing Pharmaceutical Industry Research Institute. "The municipal FDA iscurrentlyinvestigating, and we will publicly explain only after their results are forthcoming."

Shanghai-based Fosun Pharma's stock [SHA:600196] has fluctuatedsincethe news broke, butendedalmost 7 percent lowertodayatCNY29.20 (USD4.27), down froma closing price ofCNY30.57onthe day of the leak.

Editor: Ben Armour