(Corrects name of regulator investigating possible corruption)

* Shares down max 10 pct, lost half value since mid-July

* Firm accused of faking vaccine production records

* Scandal has sparked online “tsunami” in China – state
media

By Adam Jourdan

SHANGHAI, July 24 (Reuters) – Chinese vaccine maker
Changsheng Biotechnology plunged by its daily limit
of 10 percent in early Tuesday trade, after police launched a
probe into illegal behavior by the firm and China’s President Xi
Jinping called for swift action.

China’s drug regulator has accused Changsheng of fabricating
production and inspection records related to a rabies vaccine
regularly given to infants, sparking public outrage.

While there have been no known reports of people being
harmed by the vaccine, Chinese regulators ordered Changsheng to
halt production and recall the product.

Changsheng apologised in a regulatory filing on Monday. The
firm was also found to have sold 252,600 substandard DPT
vaccines, a mandatory vaccine in China to inoculate children
against diphtheria, whooping cough and tetanus.

Changsheng is now being investigated by multiple authorities
in China, including the securities regulator and the country’s
top graft watchdog. The Central Commission for Discipline
Inspection (CCDI) said on Tuesday it had begun an investigation
into possible corruption at the firm.

The scandal, which dragged down healthcare stocks across the
board on Monday, has now wiped around $1.8 billion from
Changsheng’s Shenzhen-listed shares since mid-July, over half
their value.

Chinese citizens have been quick to express their fury
online with one discussion hashtag on the Sina Weibo microblog
gathering over 600 million views. The state-run Global Times
newspaper said in an editorial late on Monday the case had
created a “tsunami” on the internet.

The scandal has prompted speculation that mainland Chinese
would take their children outside mainland China for vaccines as
has happened during previous scandals, which could lead to a
shortage in Chinese-controlled regions like Hong Kong or Macau.

The Hong Kong Department of Health told Reuters local supply
of the vaccines remained stable and it would closely monitor the
situation. Macau’s health bureau said current supply was
sufficient for residents and there was no need for concern.
($1 = 6.8204 Chinese yuan)
(Reporting by Adam Jourdan; Additional reporting by Farah
Master and Anne Marie Roantree in HONG KONG; Editing by Edwina
Gibbs)