On November 3, CSPC PHARMA (01093.HK) announced that its executive director Pan Weidong was fined RMB5 million by China’s securities regulator for insider trading and ordered to dispose of illegally held shares.

Pan has served as an executive director of CSPC PHARMA since 2006. Between 2017 and September 2024, he concurrently chaired the board of the group’s subsidiary, Sinoway Pharmaceutical (300765.SZ), playing a key role in its IPO and M&A activities.

The penalty relates to a planned acquisition during Pan’s tenure at Sinoway. On January 10, 2024, Sinoway disclosed plans to acquire 100% equity in CSPC Baike (Shandong) Biopharmaceutical. Prior to the announcement, from December 8–20, 2023, Pan used CSPC EBP’s securities account to purchase Sinoway shares worth nearly RMB100 million.

The trades currently show no profit. As CSPC EBP has not reduced its holdings and Sinoway’s stock price now sits below the purchase level, Pan’s transactions are effectively loss-making.

The China Securities Regulatory Commission (CSRC) noted Pan evaded and obstructed inquiries during investigations. At the hearing, Pan disputed the insider trading allegations, arguing the CSRC misidentified the material non-public information timeline and that his actions were work-related. He also denied non-cooperation and sought exemption from penalties, which the CSRC rejected.

Notably, the CSRC published the penalty decision on October 16, 2025, while CSPC PHARMA disclosed it over two weeks later. The group stated CSPC EBP’s share purchases were announced on December 8 and 21, 2023, and the Sinoway acquisition was terminated. It emphasized Pan’s right to seek administrative reconsideration or litigation, adding the incident would not materially impact operations.

Three others were penalized for related trades: Sinoway’s former board secretary Du Ying (confiscated RMB370,000 gains + RMB1.5 million fine), ex-director Zhang Heming (RMB152,000 confiscated + RMB1.5 million fine), and CSPC executive Zhen Hong (RMB795,000 confiscated + RMB2.38 million fine)—all having profited from the dealings.

On November 4, CSPC PHARMA shares fell 4.42% to HK$7.35 (market cap: HK$84.7 billion), while Sinoway dropped 5.29% to RMB33.32 (market cap: RMB46.8 billion).