AstraZeneca says its China president is being held in custody

The head of AstraZeneca’s international business has been arrested in China and separately about 100 former employees have been sentenced for alleged insurance fraud in the FTSE 100 company’s second-biggest market.
Britain’s biggest pharmaceuticals company released the information on Wednesday as it tried to calm investor fears after Chinese media reports of widening investigations by authorities triggered a renewed sell-off of its shares on the London Stock Exchange.
Aradhana Sarin, AstraZeneca’s chief financial officer, hosted a call with industry analysts in an attempt by the company, based in Cambridge, to bolster confidence in the outlook for a China business that accounted for about 13 per cent of its $45.8 billion sales last year.
AstraZeneca revealed last week that Leon Wang, its executive vice-president for international and China president, was under investigation, heightening concerns. It has now clarified that Wang was under detention in Shenzhen, a city in southeastern China. The company remains unclear why Wang, who has been an important figure for AstraZeneca in China since 2013, has been detained but understands that it does not relate to a medical insurance fraud investigation, dating back to 2021, where test results were allegedly falsified to qualify patients for reimbursement for AstraZeneca’s blockbuster Tagrisso drug. About 100 former employees have been sentenced and none of them are executives, despite a Chinese media report to the contrary on Tuesday. All are believed to be Chinese.
The Chinese authorities are also pursuing a separate investigation relating to a more recent issue concerning the alleged illegal importation of unapproved medicines from Hong Kong into mainland China and data privacy. AstraZeneca is aware of two current and two former executives in China who are under investigation, out of a total of about eight individuals.
The Anglo-Swedish company’s expansion in the world’s second-biggest economy has been a key driver of its transformation over the past 12 years under Sir Pascal Soriot, the group chief executive. But the share sell-off on concerns over its outlook in China has meant that Shell has overtaken AstraZeneca to once more become the most valuable company on the FTSE 100.
Emily Field, an analyst at Barclays, told clients that the 12 per cent fall in AstraZeneca’s shares since last Wednesday “given what we know thus far is a dramatic overreaction”.
She said: “China is 13 per cent of AstraZeneca’s total sales, operating margins in China are lower than the company average and at this stage we have no evidence to suggest the investigation is broader than oncology.”
Shares in AstraZeneca, however, gave up gains earlier in the day to close down £1.92, 1.9 per cent, at £99.22.