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August 6, 2010

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Former executive named in bribery investigation

SHANGHAI officials have confirmed that a top executive at a local pharmaceutical company is under investigation for taking bribes.

Wu Jianwen, former president of Shanghai Pharmaceutical Group, is under investigation for "economic issues," Lu Mingfang, chairman of its listed unit Shanghai Pharmaceutical Holding Co, told a mid-term earnings briefing on Wednesday.

"Wu has been dismissed of his job at the group and his personal behavior won't affect the company's business operations," Lu said.

Wu is also no longer in the list of top company officials on the group's website.

Deputy Vice President Zhang Jialin will take over Wu's position.

Zhou Peng, an official from the legislature of the Pudong New Area, said yesterday: "Wu is no longer a deputy to the district People's Congress."

Wu, 44, joined the pharmaceutical group in 1991 and became president at the end of 2008. He had worked in Shanghai New Asiatic Pharmaceuticals and Shanghai Asia Pioneer Pharmaceutical, both subsidiaries of Shanghai Pharmaceutical Group.

The group is the controlling shareholder of the listed Shanghai Pharmaceutical Holding Co with a 39.91 percent stake.

Its other shareholders include the Shanghai State-owned Assets Supervision and Administration Commission and Shenergy Group.

Antibiotics business is not a part of the listed assets of Shanghai Pharmaceutical Holding as it didn't meet China Securities Regulatory Commission's rules. Wu is reported to have sold antibiotics to subcontractors at low prices and taken bribes from them while he was in charge of New Asiatic Pharmaceuticals and Asia Pioneer Pharmaceutical. Discrepancies came to light during auditing for the conglomerate's reorganization earlier this year. Company officials refused to comment on the reports.

China Business News said Wu's case involved 8 million yuan (US$1.17 million).

Shanghai Pharmaceutical Holding acquired Shanghai Industrial Pharmaceutical Investment Co and Shanghai Zhongxi Pharmaceutical Co through share exchange and also acquired unlisted assets in Shanghai Pharmaceutical Group and SIPH in March this year.

It thus became the largest listed pharmaceutical company in China with a market value of over 32 billion yuan. The company expects to generate over 500 million yuan in income this year through mergers and acquisitions, and total sales revenue could reach 50 million yuan.

The group's profit jumped 68 percent year on year to 766 million yuan in the first half this year, the company said in a statement to Shanghai Stock Exchange.


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