China's food and drug watchdog announced on Friday that 254 pharmaceutical enterprises, or 12.7 percent of all capsule makers in the country, were found to be producing unsafe drug capsules during a month-long inspection program that ended on Thursday.

Of the 11,561 batches of drugs tested, 5.8 percent were found to contain excessive levels of chromium, according to the State Food and Drug Administration (SFDA), which began the checks after a media expose of companies producing such capsules.

The agency ordered substandard drugs to be immediately taken off shelves, sealed, recalled and destroyed.

Meanwhile, every batch of capsules produced by problematic companies was checked one after another, the SFDA said in a statement.

In April, reports implicated several Chinese pharmaceutical firms in the production of capsules made from industrial gelatin derived from scraps of leather material, which contains a greater amount of chromium than edible gelatin.

Chromium can be toxic and carcinogenic if ingested in large amounts.

A regulation on the production of edible gelatin issued by the Ministry of Health in 2005 explicitly banned the use of leather scraps in edible gelatin manufacturing.

The SFDA has urged local authorities to investigate and "severely punish" problematic pharmaceutical makers them in line with laws and regulations. Those suspected of crimes should be referred to the police, it said.

The statement added that local authorities have investigated 236 capsule makers, ordering 42 of them to halt production, closing down 84 production lines, revoking seven companies' capsule production licenses and referring 13 to police.