Photo/Shetuwang

May 5 (NBD) –Zhao Tao, father of a former Chinese student in Stanford University, for the first time  on May 3 responded to the 6.5-million-U.S. dollar Stanford payment, saying that his daughter's studying in the U.S. was a private family matter, and the money resource had nothing to do with Buchang Pharmaceuticals where Zhao serves as the president.

Zhao's family was reported to have paid $6.5mln to get the daughter, Zhao Yusi, into Stanford. The figure was by far the highest amount in all bribery cases amid the U.S. college admission scandal, thus quickly throwing the wealthy house into the heated public debates.

Zhao also stated his private matter would neither affect Buchang's financial status nor its normal operation.

On the same day, Zhao Yusi's mother released a statement, asserting that they were misled and believed the payment was merely an ordinary donation to Stanford and not related to Zhang Yusi's entry into the highly selective institution.

In the statement, she described her daughter as "a victim of the fraud" and disclosed that they have currently entrusted lawyers to deal with the issue. In late March, Zhao Yusi has been expelled by Stanford, two years after being admitted. 

In the scandal swirl, apart from the family itself, the pharmaceutical company owned by Zhao Tao also drew wide attention. Founded in 2001, Shanghai-listed Buchang engages in the R&D, production and sales of Chinese patent medicine.

From the company's financial results for 2018, National Business Daily (NBD) noticed that the annual salary for Zhao Tao last year stood at 1.36 million yuan (202,123 U.S. dollars), which means the purported $6.5mln Standard payment would cost Zhao Tao around 32 years of salaries. 

According to financial results of 2018, Buchang reaped revenues of approximately 13.7 billion yuan (2.0 billion U.S. dollars), a year-on-year increase of 1.4 percent, while grossing net income attributable to shareholders of 1.9 billion yuan (282.4 million U.S. dollars), rising by 15.3 percent over the prior year.

Despite the fact that the net profits are not eye-catching, the company gross profit margin was astonishingly high, which stood at around 79 percent in 2018. From 2012 to 2017, the number was hanging above 80 percent.

In addition, the higher-than-average selling expenses also put a spotlight on the company.

Last year, the company's marketing and consulting outlay reached 7.5 billion yuan (1.1 billion U.S. dollars), accounting for 93.15 percent of the selling costs, while the average selling costs in the industry only totaled around 1.9 billion yuan.

As of the closing time on April 30, the market cap of Buchang was about 28.3 billion yuan (4.2 billion U.S. dollars). Zhao Tao is referred to as the richest man in Shandong where Buchang is situated.

Buchang is not the only income source for the Zhao family. NBD found that Zhao Tao takes the position of director in 16 other companies including Dan Hong (H.K.) Technology Limited, Yeter International Limited and Shenzhou Technology.

A profile in Forbes lists net worth of Zhao Tao, who has a Singaporean citizenship, as $1.8 bln, ranking 15th in Singapore. 

Besides, in China Rich List 2017 released by Hurun, Zhao Tao took the 65th place with wealth of $4.9bln and the 82th place in the 2018 list.

Email: gaohan@nbd.com.cn