HONG KONG – Leading Chinese vaccine maker Sinovac Biotech Ltd. resorted to the Hong Kong courts to fight off an attempted "coup" by a minority shareholder – an attempt that involved presenting allegedly fake documents filed in Hong Kong that suggested top management at Sinovac Biotech's holding company had resigned.
Sinovac Biotech (Hong Kong) Ltd. holds a 73.09 percent stake in Sinovac Biotech. Another company, Sinobioway Biomedicine Co., holds a 26.91 percent stake. Sinobioway is led by Aihua Pan. Sinovac Hong Kong and Sinobioway have been involved in a dispute over the privatization of Sinovac Biotech since 2016.
"Unknown individuals have used a falsified version of the company seal of Sinovac Hong Kong and used unauthorized forgeries of the signatures of Weidong Yin and Nan Wang, directors of Sinovac Hong Kong, to submit false letters of resignation to the Hong Kong Companies Registry," Sinovac said in a statement earlier this month.
On Oct. 20, the High Court of Hong Kong handed down an interim injunction to nullify and remove the forged documents. An independent forensic examinations center backed the allegation that both the seal and the signatures used in the documents filed in Hong Kong were forged.
The documents in question may have also been used in dealings with the Industry and Commerce Bureau of Beijing, Sinovac said.
Sinovac Beijing is one of China's premiere vaccine makers in China. The company supplies vaccines against enterovirus 71, hepatitis A and B, seasonal flu, avian flu, swine flu and mumps.
Helen Yang, director of international business development and investor relations at Sinovac, told BioWorld that both directors Yin and Wang will continue to pursue legal proceedings.
Meanwhile, Sinobioway has insisted that Yin and Wang have indeed been ousted in a response to BioWorld's request for comment regarding the case.
"They refuse to admit that they have been removed from the board and therefore made such statements," said Yizhe Wang, a spokesperson of Sinobioway, without discussing the authenticity of the documents in question.
He said Sinobioway has a series of concerns with both directors.
Court cases are also underway in the U.S. and Antigua and Barbuda.
Sinovac has said in official statements that its board and management "remain unchanged by the unauthorized actions of Sinobioway and the dissident shareholders."
Beyond the legal challenges, Sinovac is facing some difficult business challenges. The company, which supplied 18 percent and 12.7 percent of the hepatitis A and seasonal flu vaccines, respectively, in China last year, was forced in May to suspend production and destroy the bulk of its hepatitis A vaccine supply that could be used to produce around 3.5 million doses.
The company said it may not be able to supply flu vaccines for the 2018-2019 flu season. (See BioWorld, May 16, 2018.)
"We will provide an update on production when appropriate," Yang said, adding that the company is working to return to normal.
Hepatitis A, hepatitis B and flu vaccines contributed 29.48 percent of Sinovac's total revenue last year, and the company exported its hepatitis A vaccines and flu vaccines to eight countries outside of China.
"The board of directors and management of Sinovac are vigorously protecting the rights of all shareholders in all applicable courts," said Yang, implying the legal disputes might not end soon.
As of Oct. 24, shares of Sinovac closed at $7.53, down 0.83 percent. The shares are down from a five-year high of $8.66 they reached in May but have not been significantly impacted by the legal disputes. In August, the shares bottomed out at $6.28.