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Behind the fall of the general manager of Tongrentang: the hidden supplier and the company are disconnected

This newspaper intern reporter Zhang Yue reported from Beijing by reporter Cao Xueping

On the morning of October 15, at the citywide warning education conference held by the Beijing Municipal Party Committee, Beijing Tongrentang Co., Ltd. (600085. Gao Zhenkun, former general manager of SH, hereinafter referred to as "Tongrentang Shares"), became the "protagonist" of the cautionary education film "EatIng Its Own Medicine".

Just the day before, Gao Zhenkun was reported to "double open" for serious violations of discipline and law.

In February this year, the Beijing Municipal Commission for Discipline Inspection announced that Gao Zhenkun, general manager of Beijing Tongrentang (Group) Co., Ltd. (hereinafter referred to as "Tongrentang Group"), was suspected of serious violations of discipline and law and was under disciplinary review and supervision investigation.

"Eating His Own "Medicine"" records Gao Zhenkun's use of fine materials to purchase more than 15 million yuan for profit, and the placement of relatives and friends in important posts in Tongrentang. According to the website of the State Supervision Commission of the Central Commission for Discipline Inspection, when making Tongrentang signature medicines such as Angong Niuhuang Pill, DahuoLuo Pill, and Niuhuang Qingxin Pill, leopard bone, musk, antelope horn, and bovine yolk are indispensable. During his tenure in Tongrentang Shares, a second-level enterprise of Tongrentang Group, Gao Zhenkun firmly held the right to purchase fine materials, used supply advantages and information advantages to make private profits, and many suppliers competed to make some food and wear for them.

The reporter of China Business Daily combed and found that the shareholders and executives of the supplier Beijing Yawei Chinese Medicine Tablet Co., Ltd. (hereinafter referred to as "Beijing Yawei") are closely related to Tongrentang shares and Tongrentang Group, and have appeared in the list of main personnel of Tongrentang shares. In this regard, the reporter sent a letter to call Tongrentang shares, and the staff said that the supplier situation may involve company secrets, and the interview needs to be asked for instructions from the Propaganda Department of the Party Committee.

Yang Fushan, a shareholder and former head of Beijing Yawei, appeared with Gao Zhenkun's name in "Eating Its Own Medicine". Yang Fushan said that in 8 years, the total amount of fine material business between Beijing Yawei and Tongrentang reached more than 100 million yuan. "I said the profit was 30 percent, and he said, 'Just leave me 10 percent.'"

Yang Fushan is the former legal representative of Beijing Yawei. According to the Judgment No. 339 of Jing 0102 Xingchu on the China Judgment Documents Network (2020), the defendant units Beijing Yawei and Beijing Huizhitang Pharmaceutical Co., Ltd. (hereinafter referred to as "Huizhitang") paid bribes several times between 2009 and 2018 in the process of applying to the Management Station of the Beijing Wildlife Conservation Nature Reserve for the identification and sales of inventory identification and sales permits for wildlife products such as antelope horn and pangolin tablets. In the end, the two companies were convicted of bribery by the unit and fined 500,000 yuan each; Yang Fushan, who committed the crime of bribery by the unit, was sentenced to one year in prison, suspended for one year, and fined 250,000 yuan.

Through the Huizhitang that appeared in the above case, the reporter found that Beijing Yawei, a supplier with a transaction volume of hundreds of millions of yuan, has a close relationship with Tongrentang shares.

According to the national enterprise credit information publicity system, in July 2003, Yang Fushan, Li Congzhi (changed to "Li Congzhi" in July 2020) and He Qian subscribed 3.96 million yuan, 1.32 million yuan and 1.32 million yuan respectively to become shareholders of Beijing Yawei, holding 60%, 20% and 20% of the shares respectively.

In June 2009, Li Congzhi, Yang Fushan and Yang Wei invested 4 million yuan, 3 million yuan and 3 million yuan respectively to establish Huizhitang, with Li Congzhi as the legal representative. In February 2014, Li Congzhi transferred 40% of the shares he held to Yang Wei, and Yang Wei and Yang Fushan currently hold 70% and 30% of the shares respectively.

The reporter found that at present, Yang Wei and others indirectly hold shares in many companies under the Tongrentang Group, and even serve as the main management personnel.

In 2008, Anguo Yida Chinese Materia Medica Co., Ltd. (hereinafter referred to as "Anguo Yida") was established, and Yang Wei and Li Congzhi paid 95% and 5% of the capital contribution in 2012 respectively to become shareholders. In August 2012, Anguo Yida and Tongrentang Co., Ltd. invested in the establishment of Beijing Tongrentang (Anguo) Chinese Materia Medica Processing Co., Ltd. (hereinafter referred to as "Tongrentang Chinese Herbal Medicine"), with Tongrentang holding 51% of the shares, with Gao Zhenkun as the legal representative and Yang Wei as the director.

According to Gao Zhenkun's resume, in November 2006, Gao Zhenkun was appointed as the general manager of Tongrentang Co., Ltd., and in October 2014, he was appointed deputy secretary, director and general manager of the party committee of Tongrentang Group.

When Tongrentang Chinese Herbal Medicine was established, it was during the period when Gao Zhenkun was the general manager of Tongrentang Shares, and Beijing Yawei had a fine material business transaction with Tongrentang Shares. At that time, Li Congzhi was a shareholder of Beijing Yawei and Yang Wei was a shareholder of Huizhitang. In 2015, Gao Zhenkun withdrew from the list of executives of Tongrentang Chinese Herbal Medicine.

Similarly, Yang Wei also indirectly holds shares in Beijing Tongrentang (Anguo) Chinese Medicine Tablets Co., Ltd. and Beijing Tongrentang Sichuan Chinese Materia Medica Science and Technology Development Co., Ltd., and serves as a director. In addition, Li Feng, the current legal representative of Beijing Yawei, and Dong Zhiqiang, the current legal representative of Huizhitang, also appeared in the list of directors of the above-mentioned companies under Tongrentang Group.

As a result, with Yang Fushan as the key figure, the legal representatives and shareholders of the two companies involved in Beijing Yawei and Huizhitang have held positions in the companies held by Tongrentang Group and Tongrentang Shares, and have a close relationship with Tongrentang Shares.

Tongrentang shares have not disclosed the list of suppliers, but the annual purchase amount is huge. According to the 2009 annual report, the purchase amount of the top five major raw material suppliers in that year has exceeded 200 million yuan, accounting for 17.49% of the company's total procurement; the procurement amount of the top five suppliers in 2020 is 1.12 billion yuan, of which the procurement amount of related parties in the procurement of the top five suppliers is 590 million yuan, accounting for 6.96% of the total annual procurement. Was Huizhitang once a supplier of Tongrentang shares? Does Beijing Yawei still supply raw materials for Tongrentang shares? In this regard, the reporter called the Propaganda Department of the Party Committee of Tongrentang Co., Ltd., but as of press time, he had not received a reply to the relevant questions.

(Editor: Yan Qiaoru Proofreader: Peng Yufeng)