Shenzhen Stock Exchange publicly denounces Changsheng Bio-technology

Shenzhen Stock Exchange publicly denounces Changsheng Bio-technology

The State Drug Administration notified on July 15 that Changchun Changsheng Bio-technology Co., Ltd. (Changchun Changsheng), subsidiary of Changsheng Bio-technology Co. Ltd. (the Company), was found violating relevant laws and regulations while producing freeze-dried rabies vaccines for human use.

According to the notification, the State Drug Administration has launched an investigation on Changchun Changsheng and found that the company has seriously violated the Criteria for Quality Control of Drug Manufacturing by falsifying production records for its freeze-dried human rabies vaccines. Its sales of freeze-dried human rabies vaccines account for nearly one fourth of the total amount in domestic market.

The announcement has provoked serious concern among the media and consumers. Jilin Food and Drug Administration has revoked Changchun Changsheng’s Drug GMP Certificate, ordering the company to halt its rabies vaccine production. In addition, Changchun Changsheng’s “Diphtheri, Tetanus and Acellular pertussis Combined Vaccine, Adsorbed” fails to meet the standards for biological potency; Jilin Food and Drug Administration have initiated a series of administrative penalties against Changchun Changsheng such as confiscation of inventories and unlawful proceeds and imposing fines.

Shenzhen Stock Exchange (SZSE) took timely regulatory measures:

  • First, we made telephone enquiries about the Company, requiring immediate disclosure of and response to the notified matters;
  • second, we issued two letters of concern to the Company and urged the company to verify the specific conditions of the products involved, the timeliness of disclosure of the matter and the impact of administrative penalties on the company;
  • third, we required the Company to disclose the on-site supervision and inspection of the drug authorities and the progress, and to duly deliver its obligation of information disclosure.

Previously, having reviewed the company’s 2017 annual report, SZSE noticed the Company’s vaccine sales boost, abnormal research and development expenditures as compared with its competitors, large purchases of wealth management products, etc., and sent a letter of enquiry to the Company for further explanations and disclosure. Having sorted out and verified the company’s information disclosure, we found that they did not disclose the investigations of relevant authorities in time and there were huge loopholes in its internal control. For the above reasons, the Company is suspected of violating relevant provisions in the Rules Governing Share Listing, and the Guidelines for the Standard Operation of Listed Companies on SME Board. SZSE has initiated a disciplinary proceeding of public denouncement against the Company and parties concerned.

SZSE attaches great importance to the timeliness and accuracy of information disclosure of listed companies. At the discovery of listed companies’ failures to timely disclose sensitive information or major misconducts, we will seriously deal with them.

Under the leadership of the China Securities Regulatory Commission, SZSE will comprehensively and strictly supervise and regulate the information disclosure of listed companies in accordance with law, crack down on and resolutely deal with violations of listed companies pertaining to information disclosure, and push listed companies to improve the quality of information disclosed and standardized operation, creating an open and transparent market environment so as to protect the legitimate rights and interests of investors.

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