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China Medicine Corporation Dismisses Frazer Frost as Auditor
Date:8/22/2011

GUANGZHOU, China, Aug. 22, 2011 /PRNewswire-Asia/ -- China Medicine Corporation (Other OTC: CHME.PK) (the "Company"), a leading manufacturer, developer and distributor of Western pharmaceuticals, traditional Chinese medicines ("TCM"), and other health products in the People's Republic of China, today announced that the Audit Committee (the "Audit Committee") of the Board of Directors of the Company (the "Board"), has dismissed Frazer Frost as the Company's independent auditor, effective August 16, 2011.

The audit reports of Frazer Frost on the financial statements of the Company as of and for the years ended December 31, 2009 and December 31, 2008 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. However, as previously disclosed, in connection with the preparation of the Company's financial statements for the year ended December 31, 2010, certain accounting and reporting errors were identified with respect to improper activities by certain employees of Guangzhou LifeTech Pharmaceutical Co. Ltd, a wholly-owned subsidiary that the Company. The Company has been conducting an internal review with respect to these matters and has observed similar errors at Guangzhou Konzern Medicine Co., Ltd., another wholly-owned subsidiary of the Company in fiscal years 2006 to 2010. In connection with the audits of the Company's financial statements for the fiscal years ended December 31, 2009 and 2008 and the subsequent interim period through August 16, 2011, except the matters mentioned above, there were: (i) no disagreements between the Company and Frazer Frost on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Frazer Frost, would have caused Frazer Frost to make reference to the subject matter of the disagreement in connection with thei
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