BELEAGUERED cord-blood bank Cordlife is now embroiled in a shareholder dispute, with two substantial shareholders separately requisitioning to remove directors from its board.
In a bourse filing on Thursday (Mar 21), Cordlife said it received a notice on Mar 14 from Phillip Securities as nominee for one shareholder, Nanjing Xinjiekou Department Store Co, requesting the board convene an extraordinary general meeting (EGM).
In the notice, there were seven ordinary resolutions. Four concerned the removal of four directors – acting chairman Ho Choon Hou and independent directors Yeo Hwee Tiong, Titus Cheong and Joseph Wong. Wong is also the company’s former chairman, who stepped down in February.
The remaining three concerned the appointment of three individuals to the board – Teo Tong Kooi, Xu Tianhong and Cai Yong.
These moves, if approved, should be effective immediately upon conclusion of the EGM, the resolutions added.
The notice further provides that if the EGM is not convened prior to the upcoming annual general meeting (AGM), it will serve as “a special notice to the company”.
Phillip Securities also requisitioned that the company directors circulate the resolutions contained in the notice to be voted on at the AGM.
Nanjing Xinjiekou Department Store holds around 20.3 per cent of Cordlife, as at Mar 20, 2023, according to Cordlife’s annual report.
Meanwhile, on Mar 18, the company received a letter from controlling shareholder TransGlobal Real Estate Group – which has a 27.9 per cent stake in Cordlife – also requisitioning an EGM to vote on three resolutions.
The first ordinary resolution in the TransGlobal letter was to reject the proposed resolutions in the Mar 14 requisition notice from Phillip Securities.
The other two ordinary resolutions concerned the removal of two non-independent, non-executive directors – Shally Chen, also known as Chen Xiaoling, and Zhai Lingyun.
Both directors were previously nominated to the board by Shanghai-listed Nanjing Xinjiekou Department Store and are involved with the company. Chen is a senior director, while Zhai is the chair of Nanjing Xinjiekou’s board.
The notice further provides that if the EGM is not convened prior to the upcoming AGM, it will serve as “a special notice to the company” and TransGlobal requested the company directors circulate the resolutions contained in the notice to be voted on at the AGM.
Cordlife said it is seeking legal advice as it considers both notices.
Cordlife called for a trading halt on Mar 14. Before the trading halt, the counter was trading down 6.3 per cent, or S$0.015, to S$0.225.
On Thursday, Cordlife said it will continue to remain under a trading halt, pending an announcement that will be released separately.
Cordlife was recently thrust into the spotlight after the Ministry of Health (MOH) began investigations into the company’s processes.
In November last year, the mainboard-listed healthcare provider was slapped with a six-month suspension notice by MOH, after it was found to have kept some cord-blood tanks at above acceptable temperature limits.
The audit found that the private cord-blood bank had exposed cryopreserved cord-blood units in seven tanks at suboptimal temperatures of above -150 degrees Celsius.
At the time, the cord-blood units in one of the seven tanks were confirmed to have been damaged. Some 2,200 cord-blood units in the tank belong to at least 2,150 clients.
MOH said the final results of the tests on the affected cord-blood units will be ready by end-March.
It also found three other process lapses at Cordlife and said it would require the healthcare group to rectify these issues by end-May.
Behind the scenes
Amid the ongoing investigations, the company also shuffled its top management. In February this year, it appointed Yiu Pang Fai as its group chief executive, succeeding Tan Poh Lan, who tendered her resignation in October last year to “pursue personal interests”.
Yiu Pang Fai was previously an executive director at TransGlobal Group’s family office division in Hong Kong, and has familial ties to Cordlife even prior to his appointment – his brother Yiu Ming Yiu is a non-independent, non-executive director of the healthcare company.
His parents, Yiu Chi Shing and Lui Yim Sheung, are also deemed interested in the shares of Cordlife held by TransGlobal Real Estate Group.
Cordlife’s board said that it had considered the recommendation of the nominating committee and assessed Yiu Pang Fai’s qualification and experience, and was of the view that he had the requisite experience and capability to assume the role of group CEO.
However, following a commentary by The Business Times on Yiu Pang Fai’s appointment, Cordlife provided a further update to the bourse, which revealed that some directors had reservations about the appointment.
After the nominating committee found that Yiu Pang Fai had the requisite experience and capability to assume the position, Cordlife’s board put his appointment to a vote.
Two directors, Yiu Ming Yiu and Chow Wai Leong, abstained from the vote “for the avoidance of doubt”, as they were nominee directors of TransGlobal Real Estate Group, and Yiu Ming Yiu was the brother of Yiu Pang Fai.
Meanwhile, Nanjing Xinjiekou-nominated directors Chen and Zhai expressed their reservations about the appointment of Yiu Pang Fai as they had proposed the board conduct an executive search for the company’s group CEO.
In particular, they proposed that the company appoint a group CEO with the requisite qualifications, expertise and experience in the medical field to “lead the company through the current crisis, as well as to prepare for the future”.
As their proposal was not supported by the other directors, they then abstained on the board’s decision to appoint Yiu Pang Fai.
At the same time Cordlife was addressing the group CEO issue, it announced that its chairman Wong had stepped down due to “personal family and health reasons”.
Then vice-chairman Ho, who is also a non-independent, non-executive director, was appointed acting chairman of the board until the appointment of a new chairman.
