(Yicai) Oct. 28 -- The chairman and three vice general managers of Shanghai Rightongene Biotechnology, who were first probed in July, have been arrested and their charges have been elevated to that of fraud from illegal business operations, the Chinese in-vitro diagnosis firm said recently. The incident could be linked to a case of medical insurance fraud involving staff at UK pharmaceutical giant AstraZeneca’s Shenzhen branch.

In line with the more serious accusation, Chairperson Xiong Hui, who is also general manager, and Vice GMs Xiong Jun, He Junyan and Xue Yuwei, have now been placed in criminal detention, when before they were permitted to stay under house arrest, Shanghai-based Rightongene said on Oct. 25.

It could be that the arrests are the result of an escalation of a case of medical insurance fraud involving AstraZeneca, which was one of Rightongene’s top five clients in 2020. Xue, who used to work at the Cambridge-based firm, moved to Rightongene in June last year as vice GM.

In July 2021, employees at AstraZeneca’s Shenzhen branch were accused of tampering with patients’ gene tests to make them eligible for medical insurance reimbursements. In the end, 17 people were arrested, the National Healthcare Security Administration and its Shenzhen branch said in separate statements in 2022.

According to court verdicts available on China Judgments Online, the AstraZeneca staff who were involved in the Shenzhen case were all charged with fraud in court rulings that were handed down in 2023 and 2024, Xu Chen, a member of the Shanghai Bar Association, told Yicai.

But there is no clear evidence to show that Shanghai-based Rightongene is linked with the Shenzhen case involving AstraZeneca staff, Xu added.

Not only Rightongene is being implicated in this spate of arrests. Another senior executive, this time the chief commercial officer at biopharmaceutical firm BeiGene, Yin Min, has been taken away for investigation, Jiemian reported on Oct. 25.

BeiGene has confirmed that a member of staff is cooperating with an investigation, but added that the incident in which the staff is involved has nothing to do with the Beijing-based company.

Yin was formerly general manager of the oncology division at AstraZeneca China and directly in charge of the lung cancer treatment, namely Osimertinib Mesylate tablets, involved in the Shenzhen case.

Rightongene’s net profit plunged 43.2 percent in the first half from the same period last year to CNY9.2 million (USD1.3 million), while revenue climbed 5.7 percent to CNY135 million (USD18.9 million).

Editors: Shi Yi, Kim Taylor