Gao Junfang, chairman of Changsheng Biotech, was taken into police custody while the Central Commission for Discipline Inspection, China's anti-graft watchdog, launched a probe into the scandal, Efe news agency reported.
The authorities found that the company falsified production and inspection records of an anti-rabies vaccine administered to humans and ordered that its production be stopped.
It also imposed a $282,000 fine on the company for manufacturing substandard DTaP vaccines, that are given to children to protect them against pertussis, diphtheria and tetanus.
President Xi Jinping described the scandal as "shocking" and "terrible" and ordered an in-depth investigation into the case.
News about the scandal has already garnered over 600 million views on social media sites while the Global Times, linked to the Communist Party of China, warned that the case could lead the country "towards chaos and creating serious unpredictability".
The newspaper reported that similar cases of adulterated drugs in the past, in China, made many parents to take their children to get them inoculated, for example, in Hong Kong and Macao, causing supply problems in the pharmaceutical industry there.
The company's stock dropped by 10 per cent daily during the last seven days on the Shenzhen Stock Exchange and the loss in investor confidence also affected other companies in the sector, including Shenzhen Kangtai Biological and Chongqing Zhifei Biological, which also registered double-digit declines.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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