Cordlife served two letters of demand from customers; any settlement likely to hit group’s finances

[SINGAPORE] Cordlife received two letters of demand on Mar 28, with regard to prior claims alleging loss and damage from cord blood units storage.

The clients, whose cord blood units are stored with Cordlife, fall under two categories. One is unlikely to be suitable for stem cell transplant purposes, and the other has units stored in tanks that are identified as falling within the “low risk” or “unaffected” band.

Those in the first category are claiming for damages which fall under breach of contract and negligence. The aggregate sum claimed by these persons falls within the jurisdiction of the General Division of the High Court, which handles claims exceeding S$250,000.

The other category of people have requested certain warranties and undertakings from the group as well as compensation for costs, among others.

Cordlife is seeking legal advice with respect to the matters set out in the letters.

At this juncture, the company is unable to determine the exact financial impact of the claims or exposure which may arise from the matters set out in the aforementioned letters.

According to the statement, if the group is required to settle the claims in the letters of demand, it will likely result in “a negative impact on the financial position of the group” for the financial year ending Dec 31.

The private cord-blood bank reported a net loss of S$6.3 million for its second half ended Dec 31, 2024, compared with a net profit of S$1.3 million in the previous corresponding period. This was largely due to the fallout from lapses discovered in the storage of the company’s cord-blood units two years ago.

Shares of Cordlife on Friday closed 7.5 per cent or S$0.012 lower at S$0.149 before the announcement.