Chinese biotech firm New Horizon’s crisis deepens as chairman and CEO quits

Earlier this year, New Horizon’s chief financial officer and auditor Deloitte both quit

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Zhu Yeqing, the former chairman and CEO of New Horizon Health. Photo: Jonathan Wong

Published: 2:30pm, 31 Dec 2024

Hong Kong-listed Chinese biotech firm New Horizon Health said its chairman and CEO stepped down amid turmoil at the company, which has been accused by a short seller of inflating its sales figures.

Zhu Yeqing resigned from both positions on Monday and the board removed him from the position of executive director, New Horizon said in a statement to the Hong Kong exchange on Tuesday. Yao Naxin, a non-executive director, will serve as chairman, it said. The company’s shares will remain suspended from trading until it fulfils its resumption requirements.

Earlier this year, New Horizon’s chief financial officer and auditor Deloitte both quit after a short seller accused the company of inflating its 2022 sales figures nearly ninefold. The shares have been halted from trading since March 27 after Deloitte questioned the authenticity of the company’s sales figures.

“The board takes the view that the management style and philosophy of [Zhu] are substantially different from that of the other members of the board, and it would not be in the best interest of the company and its shareholders as a whole to allow [Zhu] to continue to take part in the management of the company,” New Horizon said in its statement.

New Horizon’s shares have lost more than 80 per cent of their value since hitting a record high in 2021. Its shares last closed at HK$14.14 on March 27, down 20 per cent from the previous trading day.

The news about Zhu could prompt fund managers that own New Horizon’s shares to further cut their share-price estimates on the stock to reflect a fair value in their investment portfolios, a move that would be in line with regulations from China’s securities regulator.