Lansen Pharmaceutical : INSIDE INFORMATION IN RELATION TO AN ADMINSTRATIVE PENALTY IMPOSED ON NINGBO LIWAH

Microsoft Word - 20151229 Lansen annoucement - ginkgo (Clean)

Hong Kong Exchanges and Clearing

Limited and The Stock Exchange of Hong

Kong

Limited take no responsibility for

the contents of this

announcement, make no

representation as to its accuracy or

completeness and expressly disclaim any li

bility

whatsoever for any loss ho

soever arising from or in reliance upon the whole or any part

of the contents of this announcement.

LANSEN PHARMACEUTICAL HOLD

朗生醫藥控股有限公司

NGS LIMITED

(incorporated in the Cayman Islands with limited liability)

(Stock code: 503)

INSIDE INFORMATION IN RELATION TO AN ADMINSTRATIVE PENALTY IMPOSED ON NINGBO LIWAH

Lansen Pharmaceutical

Holdings

Limited (the "Company", together with its

subsidiaries, the "Group")

makes this announcement pursuant to Rule 13.09 of the

Rules Governing the Listing of Securities on

The Stock

Exchange

of Hong

Kong

Limited and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).

Ningbo Liwah Pharmaceutical Company Limited ("Ningbo Liwah") is a wholly owned

subsidiary of the Company established under the laws o

the People's Republic of

China ("PRC"). Ningbo Liwah owns and operates manufacturing facilities in Ningbo, PRC. Among the products manufactured by Ningbo Liwah are ginkgo extracts and

ginkgo tablets

(ginkgo extracts and ginkgo

tablets, together "ginkgo products").

Ningbo Liwah

sold gingko extracts

to other pharmaceutical and health supplement

manufacturers for use in their products; as well as using the gingko extracts to produce its own ginkgo tablets for sales in China market.

Early this year, China

Food and

Drug Administratio

("CFDA") conducted a

nationwide inspection and

regulation

on ginkgo products

to determine whether the

sourcing, production and quality controls of manufacturers in the PRC meet national standards. During the inspection, a number of batches of ginkgo produced by Ningbo

Liwah were found to fall short of national standards. Ningbo Liwah

cooperated with

CFDA and initiated a recall of its ginkgo products from the markets. The Company has

since

implemented a series of measures to rectify its production

management and

strengthen internal control management, in order to prevent similar events happening again.

from

In December 2015, because of the above findings by CFDA and upon an investigation by the relevant regulatory authorities in China, the production and sale of sub-standard

ginkgo tablets by Ningbo Liwah were determined to be in

reach of relevant rules and

regulations in China and an administrative penalty of RMB18.29 million (USD2.74 million) was imposed on Ningbo Liwah.

The administrative penalty on Ningbo Liwah is required to be settled by three instalment payments (RMB3.65 million (USD0.54 million) before 31 December 2015, RMB7.32 million (USD1.10 million) before 30 June 2016 and RMB7.32 million (USD1.10 million) before 25 November 2016). The amount of the administrative penalty will be reflected in the profit and loss of the Group for the year 2015 but will have minimum impact on the Group's cashflow, and it will not affect the Group's business development.

Going forward, the Company will continue its effort to strengthen regulatory compliance of its products, and to review and implement management restructuring, where necessary. The Company will take steps to mend the relationship with affected customers. With strong dedication to ensure high product quality and client satisfaction, the Company would re-establish market confidence in its products.

In addition, the Company will also focus on launching new products such as Bio-Rad diagnostics and Botai's Fillderm collagen injectable fillers; and expanding sales of its existing products such as Pafulin, Sicorten Plus and Kefumei facial masks. The Company expects these products would become major growth drivers and contribute earning to the Group. Meanwhile, the Company is actively seeking acquisition opportunities of plant extract and healthcare business to strengthen and expand its healthcare business and product portfolio.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

Lansen Pharmaceutical Holdings Limited Stephen Burnau Hunt

Chairman

Hong Kong, 29 December 2015

As at the date of this announcement, the executive Director is Mr. Liu Bang Min; the non-executive Directors are Mr. Stephen Burnau Hunt, Mr. Lee Jin Yi, Ms. Yip Pui Ling, Rebecca, Mr. Tang Jun and Ms. Tao Fang Fang; the independent non-executive Directors are Mr. Chan Kee Huen, Michael, Mr. Tang Chiu Ping, Raymond and Mr. Fritz Heinrich Horlacher.

For the purpose of this announcement, unless otherwise defined, conversions of RMB into US$ are based on approximate exchange rate of RMB1 = US$0.15. The exchange rate is set out for the purposes of illustration only. No representation is made that any amount into US$ or RMB could have been or could be converted at the above rate or at any other rates.