China’s healthcare tycoons lose $17 billion as crackdown spreads

China’s latest anti-corruption crackdown is hammering the personal wealth of the nation’s healthcare tycoons.

The combined fortune of the top 15 Chinese healthcare billionaires has fallen 17 per cent to US$84.1 billion from US$101.4 billion at the end of last year, according to the Bloomberg Billionaires Index.

The drop comes as the country’s top regulators started a sweeping anti-corruption campaign across the nation’s healthcare sector about two months ago. It has resulted in hundreds of hospital chiefs and pharmaceutical executives being probed, sparking a sectorwide share slump as investors chose to sell instead of guessing which companies will be hit by the clampdown.

The focus on healthcare comes after similar market-roiling campaigns to reform the real estate and education sectors, which banned most tutoring companies from making a profit.

“This is a much bigger sector than online tutoring and increasingly dependent on private sector investment,” Alicia Garcia Herrero, chief economist for Asia-Pacific at Natixis, said about the consequences for China’s healthcare sector. “This time around the crackdown could exert additional pressures, dampening investment.”

In dollar terms, Chen Bang, the chairman of Aier Eye Hospital Group, has seen the biggest fall in his personal fortune. It has dropped by US$3.4 billion since the beginning of the year to US$9.5 billion after shares of the ophthalmic medical group fell about 25 per cent since January.

Xu Hang, co-founder of Shenzhen Mindray Bio-Medical Eletronics, and Zhong Huijuan, founder and chair of Hansoh Pharmaceutical Group, both lost about US$2.3 billion. Zhong, a former chemistry teacher, founded Hansoh in 1995, which has since become one of China’s largest makers of psychotropic medications.

Shanghai United Imaging Healthcare founder Xue Min saw his fortune shrink by 44 per cent this year. The company completed an initial public offering last year after revenue surged from scanners and X-ray systems during the pandemic.

The clampdown on the health sector was to be expected after the excess stemming from years of zero-Covid policies, Garcia Herrero said.

The sector had until recently been growing at a breakneck pace to accommodate the country’s ageing population and expanding middle class. Yet, healthcare workers, including the nation’s 4.4 million doctors and 5.2 million nurses, have not reaped the gains in terms of wages. That has spawned practices that boost the pay of medical workers, such as companies giving kickbacks to doctors for prescribing their drugs or using their medical devices.

The recent clampdown has spurred investor concerns that healthcare companies will see lower spending by public hospitals for medicine and equipment, which could hurt profitability.

Over the past three years, high-profile crackdowns in various sectors have slashed the valuations of many star companies including Ant Group and Didi Global. Although China has signalled a more welcoming environment for businesses in the past few months, and announced a plan to set up a new agency to promote private sector growth, investors remain sceptical.

Still, the anti-corruption campaign in healthcare may finish earlier than expected, Citigroup analysts including John Yung said in a note this month. In the medium to long term, industry leaders should be able to consolidate market share and deliver higher profitability due to permanently lowered selling expenses, they said.

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Armed robbers raid Riham depot in Ntinda, shoot manager

Police are hunting for thugs who raided a Riham depot yesterday night in Ntinda and shot at its manager after failing to get money from him.

The injured manager has been identified by police detectives as Sserunkuma who is currently receiving treatment at Life Link Hospital.

Sserunkuma has reportedly told police that at around 8 pm, armed men gained access to his office and quickly put him at gunpoint. He said that the robbers ordered him to surrender all the money that was in his possession.

“I told them that I did not have any money on me. I think they thought I was deceiving them and they decided to shoot at me. They took my phones and some small money that was on me,” Sserunkuma reportedly told detectives.

The incident has since been taken over by Kira Road policing division which is working with the Closed Circuit Television (CCTV) team to ascertain the movement of the attackers who are believed to have used a motorcycle.

A witness told Ntinda police officers who arrived at the scene about 30 minutes later that the attackers came on a motorcycle disguised as customers. One of them was wearing something that looked like a jacket which is believed to have been used to conceal the gun.

“We heard a bullet inside the depot and we saw these people swiftly leaving this place. They even fired some bullets outside perhaps to scare us away,” a witness told police.

It is reported that one of the attackers looked like a person often seen in Ntinda. Luke Owoyesigyire, the deputy Kampala metropolitan police spokesperson confirmed that the attackers injured two people in the incident. He added that the robbers shot at Sserunkuma because he did not have the money they wanted.

It is alleged that the attackers had studied the movement patterns of the depot staff when going to bank the money. Armed robberies have often targeted mobile money agents and supermarkets that are found of keeping large sums of money up to late night hours. A number of people operating mobile money shops and supermarkets have been shot to death or injured in areas of Nsangi, Kyengera, Kajjansi, Kassanda, Mubende, and Kyotera in the last four months.

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Rwanda-bound fuel tanker bursts into flames in Kabale after accident

Transport at the Uganda-Rwanda border along the Kabale-Katuna road was on Saturday morning paralyzed after a fuel tanker burst into flames after failing to negotiate a corner.

The accident occurred at Nyakasharara village in Kicumbi parish, Kamuganguzi sub-county, Kabale district. According to eyewitnesses, the fuel tanker was heading to Kigali, Rwanda from Mombasa, Kenya.

They say that the driver, who could have failed to control the vehicle, came hooting endlessly while driving at a very high speed.       

After the driver failed to negotiate a sharp corner at Nyakasharara, the vehicle rolled and immediately burst into flames, burning beyond recognition. They however say that the driver and turnboy managed to get out unhurt and fled. 

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