China National Pharmaceutical Group Corp, China's largest State-owned pharmaceutical group, also known as Sinopharm, plans to further increase the power of its board of directors as part of the company's mixed ownership reform process.
According to Securities Daily, a person close to the corporation said Sinopharm had submitted the second draft of its mixed ownership reform plan to the State-owned Assets Supervision and Administration Commission. The company submitted its first draft last February 2015.
"The reform plan has yet to be approved by the SASAC. The latest proposal mentioned the power of the board of directors, which, possibly, the company was required to further enhance," the person was quoted as saying by the daily financial newspaper on Tuesday.
It is normal practice to have a second submission. If the SASAC considers that the draft needs to be more detailed, the reform plan may require further adjustment.
Sinopharm declined to comment on the report.
Xu Ming, deputy director of the China Chamber of Commerce for Import and Export of Medicines and Health Products, said Sinopharm, as a large State-owned enterprise, has been leading the development of the pharmaceutical industry in China. It has experience worth sharing from its supply-side structural reform.
"Sinopharm is competitive, and much of its outbound investment has been successful. The company has stepped up its internal reforms in recent years, which have helped it reach great achievements," Xu said.
According to Xu, more than 20,000 pharmaceutical companies are registered in China, including SOEs, private companies and joint ventures. State-owned firms account for less than 10 percent of the total.
"The industry now faces a fully competitive market, while the SOEs need to solve many issues urgently, including improving management levels, operational efficiency and international competitiveness," he added.
Xu said Sinopharm's mixed ownership reform started the transformation of pharmaceutical SOEs.
Sinopharm is one of the six State-owned enterprises chosen two years ago to pilot reforms in ownership, management and supervision, including selectively setting up investment companies and a board of directors system, according to the SASAC.
The board of directors system is meant to make the board act as the company's decision-making body, while reducing the management entitlements of investors, Xinhua News Agency reported.
The corporation was ranked 357th in Fortune Magazine top 500 in 2014 and in eighth place among all pharmaceutical enterprises on the list.
Six listed companies are under Sinopharm－Sinopharm Group Holding Co Ltd and China Traditional Chinese Medicine Co Ltd, which are listed in Hong Kong, Shanghai-listed China National Medicines Co Ltd, Beijing Tiantan Biological Products Co Ltd and Shyndec Pharmaceutical Co Ltd, plus Shenzhen-listed Shenzhen Accord Pharmaceutical Co Ltd.
