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On the evening of July 22, Guangzhou Pharmaceutical Group Co., Ltd. (hereinafter referred to as Guangzhou Pharmaceutical Group), the largest state-owned pharmaceutical company in South China, and its listed company Baiyunshan (600332.SH; 00874.HK) disclosed that it had received a resignation report from its chairman, Li Chuyuan. "Due to personal reasons," Li Chuyuan resigned from his positions as chairman of the company and no longer held any position in the company. A vice chairman will perform his duties on his behalf until the board of directors elects a new chairman. Yicai.com reporters confirmed from multiple independent sources that Li Chuyuan had been taken away by relevant departments for investigation.

At the opening of the morning on July 23, Baiyunshan's stock price rose slightly first, and then fell back. As of press time, A shares were trading at more than 30 yuan, with a total market value of 49.9 billion yuan; H shares were trading at more than 21 yuan, with a market value of 34.4 billion Hong Kong dollars.

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"I heard the day before yesterday that Li Chuyuan was in (under investigation), and his family members were also investigated." A person close to the state-owned assets system in Guangdong Province told the First Financial reporter. A core person close to Guangzhou Pharmaceutical Group also confirmed the news that Li Chuyuan was under investigation.

According to the official account of "Guangdong Pharmaceutical Baiyunshan", Li Chuyuan last participated in a public event on July 13. On that day, Guangzhou Pharmaceutical Group and the (China) Alzheimer's Disease Prevention and Treatment Association held the "2024 International Academic Conference on Alzheimer's Disease and Related Diseases", and Li Chuyuan delivered a speech at the opening ceremony of the conference.

Public information shows that Guangzhou Pharmaceutical Group is a wholly state-owned company authorized by the Guangzhou Municipal Government to operate and manage state-owned assets. It is engaged in the research and development, production and sales of products related to the entire medicine, such as Chinese patent medicines, chemical medicines, biological medicines, health products, medical devices, and the provision of medical and health services. It is a large enterprise group integrating science, industry, and trade that is supported and developed by Guangzhou. Guangzhou Pharmaceutical Group owns one listed company, Baiyun Mountain, and 30 member companies, including "Wanglaoji" with a brand value of 108 billion yuan, "Baiyun Mountain" with a brand value of 28.3 billion yuan, "Chenliji", the world's longest-lived pharmaceutical factory with a history of more than 400 years, and 12 other Chinese time-honored enterprises.

According to his resume, Li Chuyuan has served as deputy director of the business department of Guangzhou Baiyunshan Pharmaceutical Factory, deputy general manager, party secretary and chairman of Baiyunshan Co., Ltd., director and party secretary of Guangzhou Baiyunshan Traditional Chinese Medicine Factory, general manager, vice chairman and deputy party secretary of Baiyunshan Hutchison Company, general manager, vice chairman and deputy party secretary of Guangzhou Pharmaceutical Group, vice chairman of Baiyunshan and vice chairman of the pharmaceutical company.

According to Baiyunshan's annual report, Li Chuyuan is a representative of the 14th National People's Congress and a member of the 12th Guangzhou Municipal Committee of the Communist Party of China. Li Chuyuan is an expert enjoying special allowances from the State Council and a national model worker.

Most people who are familiar with Li Chuyuan say that he is a high-profile person as the head of a state-owned enterprise. He often participates in celebrity selection activities of various social organizations. He has won the titles of 2022 China Pharmaceutical Economic Person of the Year, China Good People List, China's Top Ten Economic Person of the Year, China's Double Support Person of the Year, Guangdong Province's Top Ten Innovative Persons, Guangdong Province's Top Ten Economic Persons, Guangzhou City's Top Ten Outstanding Youth, etc. In June 2023, he was elected as a foreign academician of the Russian Academy of Engineering.

"When a similar 'top leader' of a state-owned enterprise is arrested, the listed company will draft a resignation report, which will be approved by the relevant departments and then brought in for the person under investigation to sign." An informed source told China Business News that after signing, the process will be followed and the listed company will disclose information.

Baiyunshan announced that after deliberation at the 12th meeting of the 9th Board of Directors, it was agreed that Yang Jun, the company's vice chairman, would perform the duties of the company's chairman on behalf of the company. The term of acting for the company will be from the date of approval by the board of directors to the date when the board of directors elects a new chairman. "The company will promptly elect directors and a new chairman in accordance with legal procedures."

Yang Jun is a senior executive who has worked with Li Chuyuan in Guangzhou Pharmaceutical Group in recent years. According to the annual report of Baiyunshan Pharmaceutical, Yang Jun has served as a director of Baiyunshan Pharmaceutical since January 2020 and as vice chairman of Baiyunshan Pharmaceutical since June 2020. He is currently the deputy secretary of the Party Committee, vice chairman and general manager of Guangzhou Pharmaceutical Group.

People in the Guangdong pharmaceutical industry also admitted that the resignation of Li Chuyuan, the core figure who had been in charge of Baiyunshan for 11 years, was not only a major personnel change within the company, but also meant that Baiyunshan might face a deep adjustment in the future.

36 years of service

In the past two days, the news that Li Chuyuan was under investigation spread like wildfire, and the industry was also shocked.

"Li Chuyuan is a relatively outstanding marketing talent among the senior executives of Guangzhou's state-owned enterprises." A senior executive of Guangzhou's state-owned enterprises who has had contact with Li Chuyuan told the First Financial reporter that in recent years, he has unreservedly promoted Guangzhou Pharmaceutical products in public.

From the early Wanglaoji and Jin Ge to the recent Ciningji, Isatis Root and Baiyun Toothpaste, Li Chuyuan would promote Guangdong Pharmaceutical's products to people whenever he participated in public events or received guests.

According to media reports, during the COVID-19 pandemic in April 2021, Li Chuyuan talked about "Drinking Isatis Root from Baiyun Mountain will make you no longer need to wear a mask" at the Boao Forum for Asia, which sparked controversy. At the Boao Forum in 2018, Li Chuyuan said that "Jinge has changed from a medicine to a sex toy needed by ordinary people", "If you are afraid of getting angry, drink Wanglaoji; if you are afraid of it not working, eat Jine". In 2017, he mentioned at the Fortune Global Forum: According to the results of the National 863 Program, drinking Wanglaoji can extend life by about 10%. Not long after, Wanglaoji's official Weibo released a message saying that the conclusion of extending life was obtained from 576 rat samples. The above-mentioned shocking remarks have repeatedly sparked heated discussions and many doubts from the outside world.

Public information shows that Li Chuyuan was born in 1965, is 59 years old, and is from Shantou, Chaoshan, Guangdong. His resume shows that Li Chuyuan started working in 1988 and has worked in Guangzhou Pharmaceutical Group for 36 years.

In an interview a few years ago, Li Chuyuan told a reporter from China Business News that he graduated from Sun Yat-sen University in 1988 at the age of 23. Due to his excellent academic performance, he was qualified for postgraduate study at the university. However, Li Chuyuan gave up the opportunity and became a laboratory technician at the Shenzhen branch of Baiyunshan Pharmaceutical Factory.

Within the Guangzhou Pharmaceutical Group, Li Chuyuan initially started as a technician, and successively served as section chief, department director, assistant general manager, deputy general manager, and general manager, rising step by step until he officially became the "top leader" of the Guangzhou Pharmaceutical Group in 2013, serving as the company's party committee secretary and chairman.

When Li Chuyuan took the helm of Guangzhou Pharmaceutical Group, an article on Guangzhou Pharmaceutical's official website described him as "having solid professional knowledge, clear work ideas, strong ability to control the overall situation, familiar with the pharmaceutical industry and the overall situation of Guangzhou Pharmaceutical Group, strategic thinking, high market sensitivity, and strong marketing capabilities."

According to the official website of Guangzhou Pharmaceutical Group, since taking office as the company's party secretary and chairman, Li Chuyuan has focused on innovation in six major areas, including strategy, financing, management, brand, technology, and industry. He has led Guangzhou Pharmaceutical Group to form four major business segments, namely, southern medicine, health, commerce, and healthcare, and cultivated three new business formats, namely, e-commerce, capital finance, and medical devices, building a basic pattern for the development of the entire industrial chain.

During the period when Li Chuyuan served as the general manager of Guangzhou Pharmaceutical Group, the company's business operations developed rapidly. In 2012, the company achieved sales revenue of 42.8 billion yuan, a year-on-year increase of 29.6%; and achieved profits and taxes of 2.832 billion yuan, a year-on-year increase of 26.0%.

"Guangzhou Pharmaceutical Group successfully recovered the production and operation rights of the red can and red bottle Wanglaoji through legal means, which not only prevented the loss of state-owned assets, but also created a new growth point for the social and economic development of Guangzhou," according to the official website of Guangzhou Pharmaceutical.

In 2013, Guangzhou Pharmaceutical Group reorganized across three exchanges and achieved overall listing. After the reorganization, the new Guangzhou Pharmaceutical became one of the largest pharmaceutical listed companies in the A-share market. In 2017, Guangzhou Pharmaceutical Group entered the "100 billion club" and has been ranked first in the list of China's top 100 industrial companies for many consecutive years.

In 2023, Baiyunshan achieved revenue of 75.515 billion yuan, a year-on-year increase of 6.68%; total profit was 5.11 billion yuan, a year-on-year increase of 1.33%; net profit attributable to shareholders of the company was 4.056 billion yuan, a year-on-year increase of 2.25%; net profit attributable to shareholders of the company after deducting non-recurring gains and losses was 3.636 billion yuan, a year-on-year increase of 9.53%.