BEIJING (dpa-AFX) - China-based Sinovac Biotech Ltd. (SVA) Tuesday announced that it will not be able to meet the deadline to file its Form 20-F annual report with the U.S. Securities and Exchange Commission or SEC following the resignation of its external auditor. The deadline to file the report with the SEC is due by April 30.
The company further called for a shareholder meeting as soon as practicable to elect a new Board that can provide the strong, stable, and legitimate leadership it needs to move forward. In the meantime, the firm also asked for the prompt reinstatement of normal trading of its shares.
Sinovac cited the need for a new Board to the potential concerns regarding the qualifications of certain current Board members and the procedures by which they were appointed, as well as the disruptive impact caused by their recent actions.
In a statement, Sinovac noted that it recently received notice of its external auditor's decision to resign from its engagement for the Company's year-end audit for the fiscal year 2024.
According to the resignation letter, the auditor's decision was prompted by an announcement the Company's current Board made on April 1, stating that the current Board members are assessing certain corporate actions taken by the former board of directors of the Company after they ceded office.
The auditor expressed concern that such a review introduces uncertainty regarding the factual and legal basis upon which its audit opinion would rely.
The company noted that the development reflects that the actions taken by the current Board have caused disruption to the Company's compliant operations and governance, and that it is deeply concerning.
According to Sinovac, the Board's stated justification for initiating this review appears to be based on a January 16, 2025 ruling by the UK Privy Council. That ruling held, among other things, that the slate of directors nominated by a group of shareholders at the Company's 2018 Annual General Meeting had been validly appointed.
However, the current composition of the Board does not reflect that slate as only three among the recently announced five directors were part of that slate, and one of those three is currently in custody following a conviction of crimes of embezzlement, forgery of government documents and seals, and forgery of company seals.
Multiple shareholders have raised serious concerns regarding the current Board's qualifications, legitimacy and its authority to act as the Company's Board, the firm noted.
Sinovac said, 'While the Privy Council's decision validated the slate of directors nominated by certain shareholders at the Company's 2018 Annual General Meeting, it did not set aside any corporate actions taken by the former board since February 2018. In fact, it was under the leadership of the former board that SINOVAC achieved tremendous growth, expanded into multiple international markets, and significantly increased both revenue and shareholder value..... Any attempt to unravel or reverse corporate actions taken by the former board would not only create operational chaos and legal uncertainty but would also undermine the Company's future growth.'
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