Sinovac Biotech Co., Ltd. Announced Changes in Its Organizational Hierarchy
Sinovac Biotech Co., Ltd, a biopharmaceutical company which focuses on research and development as well as commercialization of vaccines, recently released its press statement which contains the important changes in its organizational hierarchy.
China, 11th July
Sinovac Biotech Co., Ltd, a biopharmaceutical company headquartered in China which strives to conduct research and development as well as commercialization of important vaccines, recently published its latest press statement containing the recently implemented changes in the organizational hierarchy of Sinovac. To safeguard the legitimate interests of Sinovac and its shareholders, the Current Board has made quite a few recommendations and has taken a number of important decisions.
After the AGM, the Former Board are no longer the Company’s directors and any actions taken by the Former Board on behalf of the Company are unlawful, have no legal effect and are against the best interests of the Company’s shareholders. Therefore, the Former Board has no authority to take unauthorized actions.
According to the recently published press statement, the former board members are no longer authorized to act in any manner on behalf of or in the name of the Company, including with respect to signing or certifying financial statements or public filings with the U.S. Securities and Exchange Commission in any capacity as an officer or director of the Company or otherwise on behalf of the Company. Both Mr. Yin and Ms. Wang were removed from their positions by the Current Board on February 7, 2018 and are no longer authorized to act in any capacity in the name of or on behalf of the Company.
The former board of directors can no longer issue restricted shares on March 7, 2018 to Weidong Yin, Nan Wang, Xiaomei Yinand others as disclosed in the Company’s 2017 annual report. In particular, Mr. Weidong Yin, one of the Former Board who was previously implicated of bribing a Chinese government official, received 160,000 restricted shares, and Ms. Nan Wang, the Company’s former CFO who together with Mr. Yin is responsible for the failure to file Company’s 2016 annual report per SEC rules, also received 160,000 restricted shares. Given that the closing price of Sinovac’s stock on March 7, 2018 was $8.25, the Former Board fraudulently and unlawfully awarded Mr. Weidong Yin and Ms. Nan Wang 320,000 restricted shares with a cash value of US$2.64 million—despite the fact that both of these individuals were removed from office by the Current Board and are no longer employed by the Company and, in Mr. Yin’s case, convicted of illegal conduct.
The press statement also mentions that the former board of directors are no longer authorized to execute and consummate the Securities Purchase Agreement (the “SPA”) by and among the Company, Vivo Capital, LLC and Prime Success, L.P. dated July 2, 2018, and to issue and sell to Vivo Capital, LLC and Prime Success, L.P., two members of the buyout consortium led by Mr. Weidong Yin, a total of 11,800,000 common shares of the Company, at a discount price of $7.35 per share as contemplated in the SPA (the “PIPE Transaction”) in the setting of other compelling offer of 8.0 per share. They are also not authorized to increase the size of the board of directors and add Mr. Shan Fu onto the board of directors as contemplated in the SPA.
The Current Board, acting on behalf of the Company and its shareholders, has renounced any and all such Unauthorized Actions. The New Board is considering all available options and legal remedies in response to the Unauthorized Actions.
According to the latest press statement, the Company is in good financial condition and the Current Board believes that the Company does not need any form of financing. In fact, the Company achieved profitability in 2017. In addition, the production facility for sIPV-based combination vaccine has been completed and put in use in 2017 and the Company has no plan to build new production facility. The press release issued by the Former Board on July 3, 2018, which claimed that the proceeds from the PIPE Transaction would be used to build production facility for sIPV-based combination vaccine, is misleading. The Current Board believes that the PIPE Transaction unlawfully designed by the Former Board was an effort to achieve Mr.Yin Weidong and his buyout consortium’s ultimate goal of acquiring the company at a discount against the interests of existing shareholders. By issuing these new shares, the Former Board reiterated the current shareholders who voted against the Former Board at the AGM with the real purpose of diluting those shareholders rather than a proper financing purpose.
The Current Board has also declared that any action taken by the Former Board concerning the operation and corporate governance of Sinovac is unlawful, has no legal effect, and against the best interests of the Company’s shareholders. No person or group shall take actions on behalf of Sinovac without the approval and authorization of the Current Board elected by shareholders on Feb 6th 2018.
About the AGM
On February 6, 2018, the Company held its AGM. At the time of the AGM, the total number of the Respondent’s common shares outstanding was 57,269,861, and 50,098,302 were present at the AGM, in person or represented by proxy, which represents eighty seven percent (87%) of the total number of shares of the Company’s common shares outstanding and entitled to vote at the AGM.
In addition to that, at the AGM, the holders of 26,072,784 shares of the Company’s common shares representing approximately 52.04% of all votes present and voting voted against the re-election of the Former Board, namely Weidong Yin, Kenneth Lee, Meng Mei and Simon Anderson and nominated and elected Guowei Wang, Jianzeng Cao, Hoi Fung Qui, Pengfei Li and Yuk Lam Lo as the Current Board of the Company.
Company Name: SinovacBiotech Co., Ltd.Contact Person: Yi Wang
Contact Person: Hua Yin