China Bear Bile Company Quits IPO Bid After Outcry
By The Associated Press 7 June 2013
BEIJING — Animal-rights activists in China are claiming a rare victory after a company that raises bears to extract bile from their gall bladders withdrew its application for a public listing, although the company hasn’t said why it pulled back.
The plan for an initial public offering by Fujian Guizhentang Pharmaceutical, which uses the bile for traditional medicines, had caused outrage on social media and sparked online petitions from activists who say the practice is cruel and painful for the bears, and that the tonics produced are of debatable medicinal validity.
The farming typically involves the daily extraction of bile from live, caged bears via catheters or holes in their bodies.
The uproar reflected both a growing environmental awareness and the increasing affluence of ordinary Chinese, who keep pets, travel overseas and are changing attitudes toward traditions they may not have questioned in the past.
When the company announced its IPO plans in February last year, dozens of Chinese entertainers, writers and other celebrities signed a petition delivered to the China Securities Regulatory Commission urging it to withhold approval for a share listing in Shenzhen.
Last week, the China Securities Regulatory Commission listed Guizhentang as one of 269 companies that had withdrawn its application for an IPO this year. It was not immediately clear why the company withdrew. The move came amid increased scrutiny of IPOs by authorities.
In October, China suspended IPOs because of a lack of investor appetite for them and general equity market declines, and they have not yet resumed.
When called for comment on Thursday, the company repeatedly hung up.
Cai Jing, an analyst at Shanghai-based Yintai Securities, said he believed Guizhentang had withdrawn its IPO because of public pressure.
“It is true that many more companies have withdrawn their IPO applications this year than normal, but I read its financial reports at the time and didn’t find any financial problem that would impede an IPO,” Cai said. “The only big problem is the pressure from the public to protect the animals.”
The bears used for the bile are Asiatic black bears, also known as moon bears because of a yellow crescent moon shape on their chests.
Guizhentang’s website says it has more than 400 of the bears and in 2009 started to invest in a base that would hold more than 1,200 bears and eventually become “the biggest bear site in the world.”
The site also says the company has become “the industry standard” in breeding and feeding bears, draining their bile and preventing disease among the captive animals. It says bear bile helps prevent hepatitis and liver diseases in humans, improves vision and detoxifies the body, citing a famous doctor born 500 years ago and other old Chinese medicine books.
Hong Kong-based Animals Asia welcomed the news of the withdrawal. Toby Zhang, its China external affairs director, said public pressure played an important role and that any future IPO application by Guizhentang would bring even more opposition.
“It is true that more and more people know about this issue,” Zhang said. “Before, bear farming was such a small issue compared with other hot topics in society.”
China stopped issuing licenses for new bear farms in 1992 to protect the welfare of wild bears, but it also said bear bile is an important raw material in traditional Chinese medicine.
While the number of bear farms has dropped from a few hundred to less than 100, the industry’s production is increasing because farms are breeding more bears and illegally taking them from the wild, Zhang said.
The China Association of Traditional Chinese Medicines said last year that China had more than 10,000 bears farmed for their bile, which can cost up to 4,000 yuan per kilogram ($295 per pound).