October 16, 2018 / 11:38 AM / a month ago

China's Changsheng Bio-technology hit by heavy penalties in vaccine scandal

BEIJING (Reuters) - A unit of China’s vaccine maker Changsheng Bio-technology Co Ltd has been hit with penalties totaling 9.1 billion yuan ($1.32 billion) after it was embroiled in a scandal over falsifying data for a rabies vaccine.

FILE PHOTO: A sign of vaccine maker Changsheng Bio-technology Co Ltd is pictured at its building in Changchun, Jilin, China July 23, 2018. REUTERS/Stringer/File Photo

China’s drug regulator said on Tuesday it had imposed the penalties on the unit Changchun Changsheng Life Sciences Ltd and banned 14 of its executives from working in the drugs sector.

In a separate statement, the China Securities and Regulatory Commission said it had also imposed a separate fine of 600,000 yuan on Changsheng Bio-technology.

The securities regulator also fined four of Changsheng Bio-technology’s executives and banned them from entering the securities market for life due to the violation of information disclosure related the vaccine scandal.

Changsheng Bio-technology sparked nationwide anger for falsifying data and producing an ineffective vaccine for babies.

Earlier this year, it said faced the specter of being delisted from the Shenzhen stock exchange due to the expectation of huge fines and the confiscation of all illegal income stemming from the scandal.

It has repeatedly delayed announcing its first-half results after issuing a profit alert in July, when it expected its six-month net profit to be between 211.4 million yuan and 317.1 million yuan, from 264.3 million yuan a year earlier.

Trading in Changsheng Bio-technology shares has been halted since Aug. 31 after the company failed to disclose its half-year earning report in due time.

On Tuesday, Changsheng Bio-technology said in a filing to the Shenzhen stock exchange that its Changchun unit planned to set up special compensation fund for its rabies vaccine scandal.

Changsheng Bio-technology plans to pay compensation varying from 200,000-650,000 yuan per person to those who have suffered from the vaccine, the company and government authorities said.

($1 = 6.9102 Chinese yuan renminbi)

Reporting by Beijing Monitoring Desk, Min Zhang and Lee Chyen Yee in Singapore; editing by David Evans

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