(Yicai Global) July 10 -- Kangmei Pharmaceutical’s actual controller Ma Xingtian has become subject to compulsory measures by police under suspicion of violation of important information disclosure requirements, the company said in a statement yesterday.

Ma's family informed the company of this news. Ma holds 32.75 percent of shares in Kangmei Pharma through his Kangmei Industrial Investment Holdings, per the statement.

Compulsory measures under Chinese law comprise bail, house arrest, temporary detention and remand.

The company’s shares [SHA: 600518] flopped 1.56 percent in mid-morning to CNY2.52 (36 US cents).

Kangmei faked operating income of CNY29.1 billion (USD4.2 billion), interest income of CNY510 million (USD72.8 million), and operating profit of CNY4.1 billion (USD585.6 million) from 2016 to 2018, the China Securities Regulatory Commission charged on its website.

The company plotted and organized long-term and systematic financial fraud, which seriously damaged the healthy ecology of the capital market, the CSRC said earlier.

Ma received a life-long market ban along with a warning and a CNY900,000 (USD 128,548.5) fine from the CSRC.

He has relinquished all his posts in Kangmei since May, the company said. Its production and operations are both normal at present, and the company's directors, supervisors and senior management personnel will strengthen its management to ensure the continuous and stable development of all businesses, it added.

The firm listed in Shanghai on March 19, 2001. Its main businesses are Chinese herbal medicine, Western medicine, health food, medical services and others.

Editor: Ben Armour