Chapter 22
Trading Has Been Suspended for SEHK: 0940
On December 4, 2015, a Hong Kong-listed animal drug company, China Animal Healthcare Ltd. (SEHK: 0940), announced a delay in the release of its financial statements. The firm alleged that a thief had stolen the truck in which the past five years of the company’s financial records were being transported. The theft was alleged to have occurred during middle of a forensic audit, when the truck’s driver, who was transporting the original financial documents from Qingyuan area to Hebel province, stopped and left the truck for a lunch break.
The company continues to be embroiled in the forensic accounting investigation, stalled as a result of the missing financials statements now labelled the “Lost Documents.” As of March 2016, the Hong Kong Stock Exchange suspended the company’s shares trading when the firm missed its deadline for filing the 2014 financial results. The suspension is expected to continue until further notice, while the company continues its search for the stolen documents.
This situation has created more than a little angst for 20% shareholder Eli Lilly’s Elanco company, which invested $100 million in the troubled China Animal Healthcare Ltd. in 2013. These recent events threaten to suspend Elanco’s efforts to expand its presence in China, giving its competition a potential advantage.
If the issue is not resolved soon, Elanco may be on the hunt for another China-based partner to give it a stake in one of China’s fastest growing markets for animal health.
(Sources: Business Insider, 2015; Weintraub, 2016)
