Cordlife shareholders vote for fresh board of directors; co-founder among those ousted

SINGAPORE - Shareholders of troubled cord blood bank Cordlife voted to remove three directors from its board at the company’s annual general meeting (AGM) held at Temasek Club on May 14.

More than 63 per cent of shareholders voted to remove acting chairman and Cordlife co-founder Ho Choon Hou and independent director Yeo Hwee Tiong.

They also voted against the re-election of another independent director, Mr Titus Cheong.

Around 200 million shares of Cordlife’s 256,307,744 ordinary shares were represented at the AGM.

The moves come after Cordlife was thrust into the spotlight over

lapses involving its storage tanks in 2023.

The lapses, involving seven storage tanks that were exposed to temperatures above acceptable limits, were uncovered by the Ministry of Health (MOH).

The ministry later suspended the cord blood bank from collecting or processing new cord blood for six months from Dec 15, 2023.

The outcome of the AGM paves the way for potential changes like a new top executive at Cordlife, should the new board of directors decide to change the direction of the company.

In the weeks leading up to the AGM, two substantial shareholders – TransGlobal Real Estate Group and Nanjing Xinjiekou Department Store – had gone head-to-head in a boardroom tussle to oust several board members and appoint new ones.

Nanjing Xinjiekou filed resolutions to remove four directors:

Dr Ho, Mr Yeo, Mr Cheong and Mr Joseph Wong. Mr Wong said he would retire after the AGM.

It also wanted to appoint three new directors – Dr Teo Tong Kooi, Dr Xu Tianhong and Mr Cai Yong – to replace the three Singapore-based directors, Dr Ho, Mr Yeo and Mr Cheong.

Cordlife’s other controlling shareholder, TransGlobal, had requisitioned to remove one director, Mr Zhai Lingyun, in a separate notice.

Mr Zhai is also chairman of Nanjing Xinjiekou, which is listed in Shanghai.

The company operates in six segments, including health and eldercare services, and has run a large-scale cord blood bank for the past 30 years.

In open letters to shareholders prior to the AGM, Dr Ho, Mr Yeo and Mr Cheong had argued that they should stay on the board as they have been the key people involved in the firm’s rectification efforts and are clear about what needs to be done to turn it around.

They pointed out that the directors Nanjing Xinjiekou wanted to appoint lack relevant knowledge of the local healthcare regulatory landscape.

Meanwhile, Nanjing Xinjiekou criticised certain members of the board, including the three it wanted to remove, for corporate governance issues and failure to appoint a group chief executive with experience in cord blood banking.

Cordlife’s current group CEO Ivan Yiu Pang Fai, an executive director from TransGlobal’s family office in Hong Kong, was appointed to replace former group CEO Tan Poh Lan on Feb 19.

In an open letter to shareholders issued on May 9, Nanjing Xinjiekou said that if it successfully reconstituted the board, it would identify a “suitable candidate with the requisite track record and expertise in the cord blood banking industry to be Cordlife’s new group chief executive officer”.

It also promised to transfer existing resources and manpower, including laboratory and technical experts from China, the US and Hong Kong to improve technical processes at the company.

Following the AGM, the new board of directors now consists of Dr Teo, Dr Xu and Mr Cai, as well as Mr Zhai, Ms Chen Xiaoling, Mr Yiu Ming Yiu and Mr Chow Wai Leong, who were re-elected.

In a Singapore Exchange filing on May 13, Cordlife said it was under a legal duty to ensure that if more than four key appointment holders were to be removed or substituted from the board at the AGM, the company must ensure that such a change does not take effect until it provides a one-month notice to the MOH.

Failure to do so would mean the company could be liable for penalties.

The outcome of the AGM means that Cordlife has not contravened any rules.

Minority shareholder Lim Boon Song, 43, felt that this was a favourable outcome for all stakeholders.

“The ex-board of directors were tardy in acting until the MOH’s investigation… For parents and employees, a change of directors would mean current and subsequent internal investigations could be overseen by fresher eyes,” said Mr Lim.

Another minority shareholder who wanted to be known only as Mr Jude said he was surprised by the results as he expected closer margins.

The 70-year-old businessman said: “I’m surprised people voted in favour of (Nanjing Xinjiekou) because we don’t know much about them. They’re not Singaporeans and they’re not here. They haven’t really given a plan on what they want to do with the company.”

Asked about his thoughts post-AGM, Dr Ho said: “I am happy that the AGM was conducted with decorum, with views heard from shareholders and questions posed.

“The board serves at the pleasure of the shareholders, and they have cast their votes. I wish the leadership all the best and hope that they continue to fulfil our obligations to our clients.”

Cordlife called for a trading halt after the AGM. Its shares were flat at 12.8 cents as at 1.14pm on May 14, when the halt was called.