Cordlife directors offer differing views on future oversight if board is rejigged

CORDLIFE Group’s directors offered different takes on who will oversee the company’s ongoing developments in Singapore, if resolutions to oust several board members pass at its upcoming annual general meeting (AGM).

The directors were responding to queries from the Singapore Exchange (SGX) in a Monday (May 6) bourse filing, ahead of its AGM on May 14.

Cordlife substantial shareholder Nanjing Xinjiekou Department Store had filed resolutions to remove four directors: acting chairman Ho Choon Hou and independent directors Yeo Hwee Tiong, Titus Cheong and Joseph Wong. (Wong has separately announced that he will retire from the board from May 14.)

Nanjing Xinjiekou also seeks to appoint three new directors: Teo Tong Kooi, Xu Tianhong and Cai Yong.

Cordlife’s controlling shareholder TransGlobal Real Estate Group also requisitioned to remove one director, Zhai Lingyun, in a separate notice,

This shareholder dispute comes as Singapore’s Ministry of Health (MOH) uncovered lapses in Cordlife’s storage of cord blood, and suspended it from collecting or processing new cord blood for six months.

Noting that the AGM resolutions seek to replace a substantial number of directors, SGX queried Cordlife on how the board intends to cooperate with the authorities and ensure continuity in resolving the issues it faces.

Cordlife’s board offered three different sets of responses. In the first set, Ho, Yeo and Cheong said that they are “unaware of any strategy or plan” on this front. They added that to their knowledge, the Nanjing Xinjiekou directors have not been personally involved nor physically present in Singapore to participate in the resolution of matters.

The trio said they are concerned that the proposed new directors “will not have sufficient time to grasp the issues at hand”, particularly in engaging MOH, SGX and affected clients.

In addition, Cordlife’s external auditor KPMG has recently resigned. “It is therefore even more important for the current board, who is familiar with the company, to stay on in order to assist in the appointment of a new external auditor,” they said.

The second set of responses came from Cordlife’s non-independent, non-executive directors Zhai Lingyun and Chen Xiaoling, who are Nanjing Xinjiekou’s nominee directors. They said that the SGX’s question should be addressed by the board after the AGM.

“The resultant board may convene an emergency meeting to discuss these issues after the AGM and update SGX and the shareholders accordingly,” said Zhai and Chen.

A third response was offered by Chow Wai Leong, a non-independent, non-executive director of Cordlife. Chow said that he will continue to commit time to “existing reparation work and collaboration with the relevant authorities”, but that the continuation of his service depends largely on the new board.

Question of Singapore-based directors

In a separate question, SGX asked who will be the directors based in Singapore – if all the AGM resolutions pass – and who would be able to oversee the ongoing developments in the company.

There were three sets of responses to this. First, Cordlife noted that if all resolutions are passed at the AGM, the board will be as follows:

• Chen Xiaoling (non-independent non-executive director)

• Yiu Ming Yiu (non-independent non-executive director)

• Chow Wai Leong (non-independent non-executive director)

• Dr Teo Tong Kooi (independent and non-executive director)

• Dr Xu Tianhong (independent and non-executive director)

• Cai Yong (independent and non-executive director)

The company said that although Yiu and Chow have listed their country of principal residence as Singapore, they are mostly not in Singapore as they are required to travel extensively for work.

In the second set of responses, Ho, Yeo and Cheong said that none of the proposed new independent directors will be based in Singapore to oversee the ongoing matters.

In the third response, Zhai and Chen cited that Teo is a permanent resident of Singapore. They added that the new directors will do their best to ensure a “smooth transition” if the resolutions are passed.

Plans for new appointments

Another query from SGX touched on whether Cordlife intends to appoint additional independent directors with experience in cord blood operations, or in serving on the boards of SGX-listed companies.

Ho, Yeo and Cheong responded that the board is interviewing new independent directors with relevant experience, but there is a likelihood that any new appointee may be removed at the AGM.

Meanwhile, Zhai and Chen said that the reconstituted board will evaluate the needs of the group and, where necessary, appoint additional directors.

Cordlife shares ended Monday flat at S$0.12, before the latest bourse filing was released. The company’s AGM will be held at the Temasek Club at 9 am on May 14.