A major pharmaceutical company in mainland China, Yunnan Baiyao Group Co., Ltd. (referred to as Yunnan Baiyao Company), saw several directors resign on the evening of May 26 following a scandal outbreak. Among them were the former wealthiest individual in Fujian Province, Chen Fashu, and his son, Chen Yanhui.
In the evening of the 26th, Yunnan Baiyao issued a statement announcing that directors Chen Fashu, Lu Hongdong, and Chen Yanhui had recently submitted resignation reports, requesting to step down from their positions as directors. The resignation reports took effect upon delivery to the board of directors. Shareholders of Yunnan Baiyao have nominated new director candidates.
The proposed director Guo Xin is recommended by the largest shareholder, Yunnan State-owned Equity Operation and Management Co., Ltd.; while You Guanghui and Shangguan Changchuan are recommended by the second largest shareholder, Xinhua Du Group Co., Ltd.
Prior to the recent resignations of several directors at Yunnan Baiyao, on May 8, Economic Observer Network reported that a scandal had erupted at the company. According to several sources familiar with the matter, from early 2023 to early 2024, former chairman Wang Minghui, former chief sales officer and senior vice president Wang Jin, former chief operating officer and senior vice president Yin Pinyao, former chief human resources officer Yu Juan, and former director Yang Changhong of Yunnan Baiyao were taken away for investigation. These executives all announced their resignation from the company for personal reasons.
According to a report by China Securities Journal on the 27th, sources revealed that Chen Fashu has been under investigation for half a year, possibly related to the same issues that Wang Minghui and others are being investigated for.
Public records show that Chen Fashu and Chen Yanhui are father and son.
Chen Fashu was once known as the “Chinese Buffett”. In 2009, Chen Fashu topped the Forbes China Rich List as the richest man in Fujian Province with a wealth of 21.85 billion yuan. According to the 2023 Hurun Global Rich List, Chen Fashu’s net worth reached 38 billion yuan.
The aforementioned reports indicated that before his departure, Chen Fashu had served as the co-chairman of Yunnan Baiyao for 5 years, wielding considerable influence in the company’s securities investment sector. From 2017 to 2019, Xinhua Du Industry, controlled by Chen Fashu, participated in Yunnan Baiyao’s mixed ownership reform and remains the second largest shareholder of Yunnan Baiyao, currently holding a 24.25% stake. In June 2018, Chen Fashu became the legal representative of Yunnan Baiyao’s controlling shareholder.