Financial Fraud and Fund Misappropriation: 500-Year-Old Brand Faces Delisting

**Traditional Chinese Medicine Giant Tianantang Locks in Delisting**

The long-standing traditional Chinese medicine company Tianantang, based on the mainland, has decided to voluntarily delist due to its stock price falling continuously below 1 yuan in the Chinese currency. Prior to this decision, the company had been incurring losses for many years and faced issues such as fund embezzlement. However, it now appears that around 50,000 shareholders have become potential buyers of its shares.

On April 25, the stock price of *ST Tianan (Tianantang) once again hit the lowest limit, closing at 0.57 yuan per share. The stock price had been below 1 yuan for 12 consecutive trading days, with a total market value remaining at only 437 million yuan.

Based on the current stock price calculation, even if the stock price rises to the daily limit for the next 8 trading days, Tianantang’s price would still not be able to reach above 1 yuan, meeting the delisting condition of “the stock price being below 1 yuan for 20 consecutive trading days,” thus opting for voluntary delisting.

Public records indicate that Tianantang was established in the first year of the Ming Dynasty, dating back to 1567, making it a renowned name in the field of traditional Chinese medicine with a history of over five hundred years. Guangdong Tianantang Pharmaceutical Co., Ltd. was founded in 1995. In May 2023, Tianantang was issued a delisting risk warning due to the financial accounting report for the year 2022 being qualified with an inability to form an opinion.

Financial reports revealed that the company had been experiencing losses for three consecutive years since 2021, amounting to over 3 billion yuan. The net profits attributable to shareholders in 2021 and 2022 were losses of 800 million yuan and 820 million yuan, respectively. According to the performance forecast for 2023 released by Tianantang, the net profit attributable to shareholders is expected to incur a loss ranging from 1.77 billion to 1.92 billion yuan. Furthermore, as early as 2018, the company had been relying on property sales to maintain profitability.

Recently, Tianantang has been surrounded by negative news. On December 4, 2023, Tianantang announced that the company and relevant parties received a “Notice of Administrative Penalty Prior to Decision” issued by the Guangdong Regulatory Bureau of the China Securities Regulatory Commission. The company and its subsidiaries were involved in non-operational fund misappropriation with the controlling shareholder, Tianantang Group, totaling 980 million yuan from 2018 to the first half of 2022.

Additionally, Tianantang also had financial fraud issues. The company inflated profits by 66 million yuan, 144 million yuan, 116 million yuan, and 103 million yuan for the years 2018 to 2021, accounting for 20.08%, 115.79%, 304.72%, and 12.25% of the reported profits for each respective year. False disclosures were found in the related annual reports.

Data from enterprise investigation platform reveals that Tianantang and its controlling shareholder, Tianantang Group, have a substantial amount of risk information, including individuals being subject to financial execution restrictions, credit defaulters, and restrictions on high consumption. Furthermore, the actual controller of the company, Ke Shuquan, has also been restricted from high consumption.

According to news from the Sina shareholder rights protection platform on April 24, a shareholder with the surname Wu submitted a rights protection application against Tianantang. Currently, the legal consultation for this rights protection case has been accepted by a lawyer. Up to now, a large number of shareholders have initiated claims against Tianantang.

As of the closing on April 24, there were 51,068 shareholders of Tianantang.

By the end of the trading session on April 25, Tianantang’s stock price closed at 0.57 yuan per share, dropping by 5.00%, with a total market value of 437 million yuan.