One of China’s largest listed drug makers said

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  • 29 May 2019 12:00 AM
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Chinese Drug Maker Firm Admits It Overstated Cash Holding by Us$4.3 Billion

One of China’s largest listed drug makers said it overstated cash positions after using false documents and transaction records. The stock tumbled by the 5% daily limit. Kangmei Pharmaceutical Co., a producer of traditional Chinese medicines that has been under a regulatory probe for months, said in a filing on Wednesday that the company overstated cash holdings by 29.9 billion yuan (US$4.3 billion). The company admitted to “serious” deficiencies in its corporate governance and internal controls, according to the filing. The revelation came after Chinese securities regulator concluded earlier this month that the company probably fabricated bank deposits and other financial transactions. Kangmei said in April an accounting “error” led to the overstatement of its 2017 cash position by about 30 billion yuan, which security lawyers described as an unprecedent amount in China. GP Certified Public Accountants, the accounting firm for Kangmei, has been under investigation by the stock market watchdog since earlier this month.

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