Shares of Hong Kong-listed Genscript Biotech plunge 25 per cent after firm says chairman has been placed under ‘residential surveillance’ by Beijing
- Zhang Fangliang under residential surveillance and four other employees detained by Customs Anti-Smuggling Department, company says in exchange filing
- Stock of Nasdaq-listed subsidiary Legend Biotech also declines
The shares of Hong Kong-listed Chinese gene and cell therapy company Genscript Biotech fell by as much as 25 per cent on Tuesday after it reported that its chairman had been placed under “residential surveillance” by Chinese customs.
Zhang Fangliang was placed “under ‘residential surveillance’ and four other employees of the company were detained for questioning” in connection with an investigation by the Customs Anti-Smuggling Department into suspected breaches of import and export regulations, the company said in a filing to the Hong Kong stock exchange on Monday.
The investigation was related to the special inspections of the management of human genetic sources by China’s ministry of science and technology along with related authorities, mainland Chinese media outlet Caixin said.
These inspections were started in December last year and covered the collection and utilisation of human genetic resources – organs, tissues and cells – and whether these had ever been exported.
China tightly regulates the export of such resources and their use by foreign organisations.
Foreign organisations and individuals, as well as organisations directly controlled by them, are not allowed to collect or preserve China’s human genetic resources, and cannot provide such resources abroad, according to a regulation issued by China’s State Council in June 2019.
