Kangmei Pharmaceutical was first accused of faking profits as far back as December 2012 by a Chinese publication. However, the allegations hardly dented its share price. In October 2018, the company's share price suddenly halved following accusations of share price manipulation possibly relating to pledged shares and margin loans. Two months later, Kangmei disclosed that it was under investigation by the Chinese securities regulator for disclosure violations. Presumably, insiders were selling out prior to this news prompting a share price collapse. Kangmei subsequently revealed in April 2019 that cash had been overstated by RMB30bn (US$4.4bn) within its 2017 financials. This presumably represented the amount of profits that had been faked. The company had likely been loss-making for many years, if not its entire 20-year listed history. Kangmei is one of the largest frauds that no-one has ever heard of.

Last updated November 2021

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