Home » The bet on medical beauty has another twists and turns, and the internal conflicts among shareholders of East China Pharmaceutical’s subsidiary draws regulatory attention | East China Medicine | Ningbo City | East China_Sina Technology

The bet on medical beauty has another twists and turns, and the internal conflicts among shareholders of East China Pharmaceutical’s subsidiary draws regulatory attention | East China Medicine | Ningbo City | East China_Sina Technology

by admin


Original title: Betting on medical beauty has another setback

□Reporting by reporter Zhang Xiaojie from Beijing

Huadong Medicine, which regards medical beauty as one of the company’s core strategic areas of the big health industry, was caught in a dispute with natural person shareholders of Huadong Ningbo Pharmaceutical Co., Ltd. And on August 27, it received a regulatory inquiry letter issued by the Zhejiang Securities Regulatory Bureau.

Public information shows that Huadong Medicine holds 51% of Huadong Ningbo. The latter is currently mainly engaged in the agency sales of biological blood products and the sales agency of the Yiwan series of hyaluronic acid from LG Life Sciences in South Korea. It also obtains the medical beauty products of Jetema from South Korea. The agency right of Botox in the Chinese market.

On the evening of August 24, Huadong Medicine disclosed that the company and its holding subsidiary Huadong Ningbo received a civil complaint, and 20 natural-person shareholders holding a total of 49% of Huadong Ningbo’s equity requested the court to order the dissolution of Huadong Ningbo. Huadong Medicine believes that the contradiction between the two parties is that natural person shareholders require the listed company Huadong Medicine to acquire 49% of its minority shares in East China Ningbo and realize cash withdrawal. However, the two parties have been unable to reach an agreement due to transfer consideration and performance commitments.

From August 25th to 27th, Huadong Ningbo issued a clarification statement through its official WeChat account for three consecutive days, denying that the management had “cashed out” and stated that Huadong Medicine “never treated Huadong Ningbo as a’pro son’. Products, medical beauty products, and cold chain logistics Huadong Medicine are all operated by wholly-owned and independent companies, which form direct competition with East China Ningbo.” In the clarification statement, East China Ningbo rebutted the reasons for disputes such as operating period issues, equity acquisition issues, and management audit issues.

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On the evening of August 27, Huadong Medicine announced that it had received a regulatory inquiry letter from the Zhejiang Securities Regulatory Bureau. The inquiry letter requested Huadong Medicine to explain in detail the historical evolution of East China Ningbo, the business situation of East China Ningbo from 2018 to the present, the specific circumstances of the disputes related to the dissolution between the company and East China Ningbo, the company found that East China Ningbo had abnormal operations and carried out management audits. The specific time, etc., and requested Huadong Medicine to explain in detail in the announcement “It was initially discovered that Feng Xingfu, as the person in charge of the actual operation and management of Huadong Ningbo, obviously violated the relevant regulations of listed companies. A large number of related transactions have led to the formation of large amounts of accounts receivable in East China Ningbo; at the same time, it was also discovered that some historical asset transactions in East China Ningbo also had specific circumstances that violated laws and regulations, and whether there were any violations of securities laws and regulations.

The above-mentioned disputes have caused market concerns, and Huadong Pharmaceutical’s stock price has declined significantly in recent days. Flush data shows that from August 25th to 27th, Huadong Medicine dropped by 13.99%. In fact, since May of this year, Huadong Medicine’s stock price has continued to fluctuate and fall. Since May 6, the company’s stock price has fallen by 40%, during which the Flush Medical Beauty Concept Index fell by 14.64%.

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According to the interim report just released, in the first half of this year, Huadong Medicine achieved operating income of 17.179 billion yuan, an increase of 3.11% year-on-year; net profit attributable to shareholders of listed companies was 1.30 billion yuan, a year-on-year decrease of 24.89%. In contrast, the company’s medical beauty business continued to maintain a recovery growth trend. During the reporting period, it achieved an overall operating income of 565 million yuan, a year-on-year increase of 46.25%. At present, medical beauty is already the most imaginative business segment of East China Medicine. Some market participants worry that if East China Ningbo is dissolved, it will have a greater impact on East China Medicine’s medical beauty business.

Huadong Medicine stated in an announcement issued on the evening of August 24 that the company is actively preparing to respond to the lawsuit and safeguarding the company’s legitimate rights and interests in accordance with the law. Since the case has not yet been heard in court, there is uncertainty about the impact on the company’s current and subsequent profits. The company believes that if East China Ningbo fails to reach an operation extension agreement between shareholders, it will enter the liquidation process, which will bring the company the value-added disposal income of related fixed assets. Do a good job in the connection and integration of the corresponding business“.


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