Zhang Xiaohui, reporter of Economic Observer Network On January 5, 2024, Tiansheng Pharmaceutical Group Co., Ltd. (002872.SZ, hereinafter referred to as "()" or "Tiansheng Pharmaceutical") disclosed the progress announcement on receiving criminal judgment and litigation matters.
In December, 2023, criminal judgment [(2022) Yu 01 Chu Zi No.21] delivered by Chongqing No.1 Intermediate People’s Court (hereinafter referred to as "Chongqing No.1 Intermediate People’s Court") showed that Liu Qun, the controlling shareholder and actual controller of ST Tiansheng, was sentenced to 19 years’ imprisonment and Tiansheng Pharmaceutical was acquitted.
The actual controller was sentenced to 19 years in prison, which is rare among listed companies. ST Tiansheng said that the company obeys the judgment and does not appeal; Liu Qun appealed.
Sentenced to 19 years.
The announcement of Tiansheng Pharmaceutical on April 26, 2018 disclosed the details that Liu Qun was taken away at that time: "On Saturday evening of March 24, 2018, Li Hong, the then general manager of the company, signed the information with the words’ lien’ in the relevant authorities, and the information was taken away by the relevant departments."
It has been five years and ten months since Liu Qun was taken away by the relevant departments of Chongqing for investigation on March 24, 2018. The case of Liu Qun was quite complicated, which led to the dismissal of the directors of several 3A hospitals in Chongqing.
Liu Qun used to be the chairman of Tiansheng Pharmaceutical. In the latest judgment of Chongqing No.1 Intermediate People’s Court, he was charged with:
He was convicted of bribery, sentenced to 11 years in prison and fined 1.5 million yuan. He was sentenced to two years’ imprisonment and fined RMB 300,000. He was sentenced to 11 years in prison and confiscated his personal property of RMB 8 million. He was convicted of misappropriating funds and sentenced to seven years in prison. False litigation was sentenced to one year’s imprisonment and fined 200,000 yuan. Decided to execute a fixed-term imprisonment of 19 years, fined RMB 2 million, and confiscated personal property of RMB 8 million.
At the beginning of his arrest, Liu Qun was also "suspected of producing and selling counterfeit drugs".
In May 2019, more than a year after Liu Qun was put on file for investigation, the indictment of the First Branch of the Chongqing Municipal People’s Procuratorate showed: (1) The defendant Liu Qun and the defendant Tiansheng Pharmaceutical were suspected of bribery and bribery to the unit; (2) The defendants Liu Qun and Li Hong and the defendant Tiansheng Pharmaceutical were suspected of producing and selling counterfeit drugs; (3) Defendants Liu Qun and Li Hong are suspected of the crime of duty embezzlement and misappropriation of funds; (4) Defendant Liu Qun is suspected of false litigation’s crime.
The crime of "suspected production and sale of counterfeit drugs" quickly changed.
In December 2019, the Decision of the First Branch of Chongqing Municipal People’s Procuratorate on the Change of Prosecution (No.1 of the First Branch of Chongqing Inspection Institute [2019]) showed that the prosecution determined that the legal application of the nature of the production and sale of counterfeit drugs by the defendant Tiansheng Pharmaceutical and the defendants Liu Qun and Li Hong had changed, and they were no longer investigated for criminal responsibility for the crime of producing and selling counterfeit drugs.
In March, 2020, Liu Qun and Tiansheng Pharmaceutical received the first criminal judgment [(2019) No.68 of Chongqing No.1 Intermediate People’s Court], and the judgments were as follows: 1. Tiansheng Pharmaceutical, the defendant, committed the crime of bribery in the company and decided to impose a fine of RMB 3.8 million. 2. Defendant Liu Qun committed the crime of bribery of the unit, bribery of the unit, embezzlement of duty, misappropriation of funds and false litigation, and decided to execute 19 years’ imprisonment, and fined RMB 2 million and confiscated property of RMB 8 million. 3. The defendant, Liu Qun, was ordered to pay back RMB 91,824,926,000 which was occupied by Tiansheng Pharmaceutical. 4. The defendant Liu Qun was ordered to pay back the misappropriated RMB 33.25 million from Tiansheng Pharmaceutical. The case changed again during the trial.
In January 2022, Tiansheng Pharmaceutical said that the company received a criminal ruling from Chongqing Higher People’s Court, which ruled that: 1. The criminal judgment of Chongqing No.1 Intermediate People’s Court (2019) No.68 at the beginning of Chongqing 01 sentence was revoked. 2. Sent back to Chongqing No.1 Intermediate People’s Court for retrial.
Tiansheng Pharmaceutical and Liu Qun waited for the latest verdict in December 2023. Tiansheng Pharmaceutical was not guilty, and Liu Qun was sentenced to 19 years in prison again.
The rare crime "false litigation crime" was triggered by bribery.
Among Liu Qun’s many crimes, one "false litigation crime" is rare. According to the judgment obtained by Economic Observer Network, Liu Qun’s crime was caused by bribing Li Jianping, president of Nanchuan District People’s Hospital in Chongqing (which has been handled separately).
On March 27, 2017, the Chongqing Commission for Discipline Inspection disclosed that Li Jianping, deputy secretary of the Party Committee and president of Nanchuan District People’s Hospital, was suspected of serious violation of discipline and was currently under organizational review.
After Li Jianping was investigated, Liu Qun, then chairman of Tiansheng Pharmaceutical, who had a lot of business dealings with Nanchuan District People’s Hospital, quickly sought a lawyer to discuss the countermeasures.
It turns out that Liu Qun once paid a bribe of RMB 1 million to Li Jianping through his younger brother Li. In order to cover up the fact of bribery of 1 million yuan, Liu Qun recruited Li and lawyer Song, and made up an IOU between Chongqing Taihong Construction Engineering Co., Ltd. (hereinafter referred to as "Taihong Company") and Li, trying to turn the bribe of 1 million yuan into a false loan relationship.
Li issued an IOU, "I received RMB 1,000,000 Yuan only from Chongqing Taihong Construction Engineering Co., Ltd. (according to the payee: Li on December 5, 2016). And on March 15, 2017 (after Li Jianping was investigated), he paid the interest of 19,500 yuan in the first quarter to Taihong Company. Since then, Li has not paid the loan interest to Taihong Company.
After Li’s breach of contract, Liu Qun instructed Taihong Company to file a lawsuit against Li through the People’s Court of Tongnan District of Chongqing (hereinafter referred to as "Tongnan Court") and recover the "remaining money". Without knowing it, Tongnan Court made a judgment on September 27, 2017 to support Taihong Company to recover the arrears.
The case was protested by the First Branch of Chongqing Procuratorate in 2019.
The reason for the Chongqing prosecutor’s protest is that at the end of 2016, Tiansheng Pharmaceutical and Liu Qun (bribery crime has been dealt with) thanked Li Jianping, the former president of Nanchuan District People’s Hospital, for his help in Tiansheng Pharmaceutical’s business, and gave him a "benefit fee" of 2 million yuan. In March, 2017, Liu Qun learned that Li Jianping was investigated by the Chongqing Commission for Discipline Inspection (Supervisory Committee) for alleged violation of discipline, and was afraid that the fact of his bribery crime would be discovered. He arranged for Liao to draw up a plan, instigated Li to sign the false loan contract with Taihong Company, and arranged for Li to pay the quarterly interest payment from December 5, 2016 to March 4, 2017, and forged false loan repayment materials.
On May 8, 2020, Tongnan Court revoked the original judgment of this case and rejected the claim of Taihong Company. Tongnan court said in the judgment:
We believe that there is no real loan relationship between Taihong Company and Li in this case. In order to cover up the criminal act of Tiansheng Pharmaceutical Group Co., Ltd. and Liu Qun, the person in charge, bribed Li Jianping, Taihong Company and Li Mou maliciously colluded, fabricated facts, forged false loan relationship materials, and filed a lawsuit in our hospital, which constituted false litigation. This behavior not only hinders the order of social management, but also hinders the order of judicial trial, and harms the national interests and social public interests.
Finally, among many crimes, Liu Qun was sentenced to one year’s imprisonment for this false litigation crime.
Liu Qun not only paid bribes to Li Jianping, but also the directors of several 3A hospitals in Chongqing were dismissed. Besides Li Jianping, there were Ma Mingyan, former director of Dianjiang People’s Hospital in Chongqing, and Wang Xiaobo, director of Fuling Central Hospital in Chongqing. (For details, please refer to the Economic Observer’s June 2, 2018, "Tiansheng Pharmaceutical Case against Chongqing Pharmaceutical Anti-corruption Storm: Three senior executives have an accident and four hospital deans have been investigated")
In addition to the directors of these hospitals, Liu Qun also "corrupted" local party and government officials through bribery.
An article on the website of the State Supervision Commission of the Central Commission for Discipline Inspection on October 13, 2018 entitled "The circle of relatives, the circle of WeChat, the circle of fellow villagers, the circle of wine tasting … is keen on engaging in" small circles "and something will happen one day" shows that Hong Chengyi, the former deputy secretary of the Wanzhou District Committee of Chongqing, is keen on the culture of "circles". He "made relatives" with Liu Qun, the chairman of Tiansheng Pharmaceutical, and made his daughter recognize Liu Qun as "michel platini" Conniving at Liu Qun’s involvement in his family affairs, he not only directly lets him hold a birthday party for himself, but also takes Liu Qun back to his hometown in Xiushan during the Spring Festival every year, giving red envelopes and lucky money to his relatives and friends, and gradually becomes a "prey".
After Liu Qun’s accident, his son Liu Shuang, born in 1993, took over as chairman and general manager of Tiansheng Pharmaceutical. Since ST Tiansheng was acquitted, the company’s share price rose for four consecutive trading days from January 2, 2024, including two consecutive trading days. On January 8, ST Tiansheng’s share price fell to 5.64 yuan per share after rising, with a total market value of 1.794 billion yuan.
Despite this, the share price of ST Tiansheng is still 9.94% higher than before the disclosure of its judgment.
Liu Qun’s case has caused quite a shock among the officialdom, hospitals and pharmaceutical enterprises in Chongqing. Because Liu Qun appealed, the case is not over yet, and the reporter of Economic Observer Network will continue to follow up the report.