(Yicai) July 23 -- Shares of Baiyunshan Pharmaceutical Holdings stumbled after the Chinese drugmaker said Chairman Li Chuyuan had resigned for “personal reasons.” He is under official investigation, sources told Yicai.

Baiyunshan [SHA: 600332] closed down 3.2 percent at CNY29.99 (USD4.12) a share in Shanghai today. The stock has still gained almost 5 percent so far this year.

Li resigned as chairman after 11 years, the Guangzhou-based company announced late yesterday, adding that Vice Chairman Yang Jun will temporarily fill his shoes.

A person close to the Guangzhou branch of the State-owned Assets Supervision and Administration Commission told Yicai today that “Li Chuyuan was taken away for an investigation two days ago. Li’s family is also being investigated.”

He last appeared in public on July 13, when he delivered a speech at a conference held by Guangzhou Pharma and the China Association for Alzheimer’s Disease, according to Baiyunshan’s WeChat account.

China has ramped up its anti-corruption drive in the medical and healthcare sectors this year as part of a broader campaign to combat graft. The campaign is addressing systemic issues such as bribery and kickbacks, which have contributed to the high costs of medical products and services.

Li also chairs Guangzhou Pharmaceutical Holdings, the largest state-owned drugs company in South China and Baiyunshan’s biggest shareholder, with a 45 percent stake. According to Guangzhou Pharma’s website, Li is still its chairman.

Baiyunshan reported a net profit of CNY4.1 billion (USD563.6 million) and revenue of CNY75.5 billion (USD10.4 billion) last year, up 2.2 percent and 6.7 percent, respectively.

Editor: Futura Costaglione