China bans six tied to $4.3 billion fraud

Bloomberg

China banned six people linked to a $4.3 billion scandal at one of the country’s biggest listed drug makers from participating in the securities industry.
The financial reporting fraud at Kangmei Pharmaceutical Co. was “premeditated, organised, long-term and systematic,” the China Securities Regulatory Commission (CSRC) said in a statement.
Kangmei Pharmaceutical said in May it overstated its cash positions by 29.9 billion yuan using false documents and transaction records — an amount one lawyer said was unprecedented in China.

Another 16 people will also be punished, the CSRC said. Kangmei Chairman Ma Xingtian is among those facing penalties.
Kangmei Pharmaceutical said in May it overstated its cash positions by 29.9 billion yuan using false documents and transaction records — an amount one lawyer said was unprecedented in China. The firm admitted to “serious” deficiencies in its corporate governance and internal controls. The producer of traditional Chinese medicines, which had been under a regulatory probe for months, said earlier that related parties used its funds to trade its shares.
The CSRC did not name the blacklisted individuals or say how long the bans would last. The ban means the six cannot engage in securities issuance, trading or other intermediary services, or work as a senior executive at a listed firm.