China Bear-Bile Farm Operator Among 269 Companies to Pull IPO

Fujian Guizhentang Pharmaceutical Co., a Chinese maker of bear-bile products, withdrew its application for an initial public offering as regulators increased scrutiny of companies seeking listings.

Guizhentang was among 269 companies to pull their applications this year, the China Securities Regulatory Commission said in statements on its website on May 31, without giving a reason for the withdrawals.

Animal-rights activists have opposed Guizhentang’s listing since last year, when Beijing Loving Animals Foundation sent the securities regulator a petition signed by 70 Chinese celebrities, including snooker champion Ding Junhui and painter Chen Danqing. Guizhentang says on its website that it can harvest bile from bears without causing discomfort. Animal welfare groups say the process is inhumane.

Guizhentang rears more than 400 black bears on its farm in the southeastern province of Fujian and is able to breed 100 cubs a year, according to its website. The company’s powders made from bear bile have medical benefits such as preventing hepatitis and other liver diseases, improving vision and detoxifying the body, according to its online products page.

Two calls by Bloomberg News to Guizhentang’s main number weren’t answered.

Initial public offerings in China have been suspended since October as investor appetite for new stock waned amid equity-market declines that dragged the benchmark Shanghai Composite index to near four-year lows. The securities regulator may begin approving IPOs again as early as mid-August, the 21st Century Business Herald reported May 29, citing an unidentified person close to regulator.

Authorities have already called for greater checks on companies seeking listings. The securities regulator in January set a deadline for advisers on offerings to submit “self-inspection” reports that check for fraud in the financial statements of companies seeking listings. The CSRC has also said legal action will be taken against issuers and advisers if misconduct such as earnings manipulation and financial irregularities is found.

— With assistance by Gregory Turk

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