SINOVAC Announces New Board Following Privy Council Judgment and Outlines Next Steps
Sinovac Biotech Ltd. (NASDAQ:SVA) (“SINOVAC” or the “Company”), a leading biopharmaceutical company in China, has announced significant developments following a ruling from the Privy Council. On February 8, 2025, SINOVAC formally received a court order (the “Order”) implementing the previously announced Privy Council Judgment (the “Judgment”). The Judgment confirmed that the slate of board nominees proposed by a group of shareholders at the Company’s 2018 Annual General Meeting (AGM) was rightfully elected and that the Company’s Rights Agreement (commonly referred to as a “poison pill agreement”) was invalid. Following the receipt of the Order, SINOVAC has begun executing the mandated changes in accordance with legal and corporate governance standards.
Key Legal and Governance Changes
As a direct result of the Privy Council’s ruling, SINOVAC’s Rights Agreement is now officially void. Consequently, all exchange shares issued under this agreement—comprising 27,777,341 common shares and 14,630,813 Convertible Series B Preferred Shares—are also invalid. These shares, which were held by the 2019 Rights Exchange Trust, will be formally canceled in compliance with the Order. This cancellation marks a crucial step in rectifying governance and shareholder equity matters that have been under dispute for several years.
Formation of the New Board of Directors
With the Judgment and Order in place, a new Board of Directors (“New Board”) has been formally constituted. The members of the New Board include:
- Dr. Chiang Li (Chairman)
- Mr. Yuk Lam Lo
- Dr. David Guowei Wang
- Mr. Pengfei Li
- Mr. Jianzeng Cao
Among these five directors, Dr. Chiang Li, Mr. Yuk Lam Lo, and Dr. David Guowei Wang have been identified as independent directors, ensuring that the Board maintains a balanced and objective approach to corporate decision-making.
The New Board has also established the necessary committees to uphold strong corporate governance:
- Audit Committee: Mr. Yuk Lam Lo and Dr. David Guowei Wang currently serve as members, with a third member to be appointed to ensure compliance with Nasdaq Rule 5605.
- Compensation Committee: Dr. Chiang Li, Mr. Yuk Lam Lo, and Dr. David Guowei Wang will oversee executive compensation and related matters.
- Corporate Governance and Nominating Committee: The same three directors—Dr. Li, Mr. Lo, and Dr. Wang—will also be responsible for governance and board nominations.
Despite the Board’s restructuring, the executive management of SINOVAC remains unchanged, ensuring operational stability while governance reforms take place.
Commitment to Shareholders and Corporate Transparency
Under the leadership of the New Board, SINOVAC is committed to acting in the best interests of the Company and its shareholders. The Board has expressed a strong commitment to transparency, effective corporate governance, and the maximization of shareholder value. By implementing necessary reforms and ensuring open communication, the Board aims to rebuild investor confidence and position the Company for long-term success.
One of the most pressing concerns for SINOVAC has been the prolonged suspension of its stock trading. Due to the former Board’s implementation of the now-invalid poison pill agreement, trading of SINOVAC’s shares has been halted for the past six years. The New Board has promptly begun engaging with Nasdaq to address regulatory concerns and facilitate the resumption of trading. Efforts are underway to address Nasdaq’s inquiries and fulfill all necessary requirements to restore the Company’s listing status.
Addressing Shareholder Equity and Trading Resumption
In addition to Nasdaq compliance efforts, the New Board is actively working to cancel the invalid Exchange Shares. This process is vital for determining the correct number of valid shares issued and outstanding. Establishing a clear and accurate shareholder structure is a critical step toward trading resumption and restoring investor confidence. The Board is committed to carrying out this process transparently and in accordance with legal and regulatory guidelines.
Future Business Updates and Strategic Direction
SINOVAC has also announced plans to provide a comprehensive business update in the near future. This update will address:
- Operational and financial performance
- Research and development initiatives
- Market expansion strategies
- Ongoing collaborations and partnerships
The Company remains dedicated to its core mission of advancing biopharmaceutical innovation and delivering high-quality healthcare solutions globally. With a newly structured Board and strengthened governance framework, SINOVAC is poised to enhance its market position and drive sustainable growth.
