Five members of the Cordlife Group have been arrested by the Commercial Affairs Department (CAD) over potential breaches of the company’s disclosure obligations in relation to the mishandling of cord blood units. They have been released on bail since.
If you didn’t know, Cordlife Group is a consumer health company and one of the leading providers of cord blood and cord lining banking services in Asia, according to Wikipedia.
These individuals include former chief executive Tan Poh Lan and four other board members: independent director Yeo Hwee Tiong and Titus Jim Cheong Tuck Yam, acting chairman Ho Choon Hou and non-independent non-executive director Chow Wai Leong.
What Happened To Cordlife Group?
The company actually faced public scrutiny last year.
The Cordlife Group had previously been involved in an investigation ever since the Ministry Of Health (MOH) discovered that seven of Cordlife Group Limited’s 22 cord blood units storage were exposed to temperatures above the acceptable limit of -150 degrees celsius.
The investigation report by MOH was released on 30 November 2024.
This incident resulted in the damage of blood cord units belonging to at least 2,150 clients with another 17,050 clients potentially affected.
In relation to the incident, a report was later released from Cordlife Group, where they mentioned that certain members had been made aware of a temperature irregularity in a tank in June 2022; the tank had been exposed to temperature irregularities for several days.
The incident was then reported to the Board in February 2023.
In a bourse filing on 22 March 2024, the company said it had received a notice on March 19 from CAD and the Monetary Authority of Singapore (MAS) requiring documents and information related to police investigations into an offense under the Securities and Futures Act.
“The company understands that the offence is in connection with potential breaches of the disclosure obligations of the company in relation to the irregular temperatures of a certain cryogenic storage tank of the company, which was first disclosed by the company in its announcement dated Nov 30, 2023,” Cordlife said in the filing.
Cordlife Group’s chief financial officer, Thet Hnin Yi, who has not been arrested, has been asked to assist with the ongoing investigations, according to the filling.
“The CAD and MAS also issued a notice to the Company pursuant to Section 21 of the Criminal Procedure Code 2010 of Singapore dated 19 March 2024, addressed to the Directors. The Company understands that the following Directors of the Company, who are not currently based in Singapore, are required to attend at the offices of the CAD for an interview in connection with the Investigations on 2 April 2024,” Cordlife Group said.
These directors include: independent director Joseph Wong Wai Leung, non-independent non-executive directors Zhai Lingyun and Chen Xiaoling and Yiu Ming Yiu.
“At the time of this announcement, the Company has received undertakings from all the Directors, Ms Tan Poh Lan and Ms Thet Hnin Yi, to inform the Board of the ongoing Investigations and subsequent developments,” added Cordlife Group.
Tan Poh Lan had tendered her resignation in October 2023, citing that she wanted to pursue “personal interests”.
However, while “majority of the Board is of the view that it would be in the interests of the Company for all Directors to continue serving on the Board,” both Zhen and Chai disagree that the directors on bail are suitable to remain on the Board.
A similar disagreement was reported in the bourse filling on 21 March 2024, where substantial shareholders expressed separate Extraordinary General Meeting (EGM) requisition notices to remove certain directors. More information can be found about it here.
One of the shareholders, Nanjing Xinjiekou Department Store, holds around 20.3 percent of Cordlife, as of 20 March 2023, according to Cordlife’s annual report.
“Depending on how the Investigations evolve, the Board will also consider the possibility of the appointment of new Independent Directors, to serve as additional checks and balances for the Company.”
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