SAIF Partners Sends Letter to Sinovac Shareholders

National Post

8 hours ago

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Highlights Current Board's Empty Promises, Failure to Deliver Value for Shareholders, and Certain Directors' Concerning Patterns of Reckless, Unethical and Illegal Actions to Retain Control of Sinovac
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SAIF Partners Urges Shareholders to Vote the GOLD Proxy Card ' FOR ' its Director Nominees to End Years of Chaos, Restore Credibility and Unlock Long-Term Value for All Sinovac Shareholders
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NEW YORK — SAIF Partners IV L.P., ('SAIF Partners'), the largest single investor in Sinovac Biotech Ltd. ('Sinovac' or the 'Company'), beneficially owning approximately 15% of the outstanding common shares, today sent a letter to Sinovac shareholders regarding the current Board's empty promises to shareholders, numerous failures overseeing the Company, and certain directors' concerning patterns of reckless, unethical and illegal actions to retain control of Sinovac.
The full text of the letter is as follows:
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July 1, 2025
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Dear Fellow Sinovac Shareholders,
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SAIF Partners ('we' or 'us') is the largest single investor and a long-term shareholder in Sinovac Biotech Ltd. ('Sinovac' or the 'Company'). We beneficially own approximately 15% of the Company's outstanding common shares. As you are likely aware, on June 24, 2025, Sinovac's Board of Directors (the 'Board') announced its intention to pay 'up to' $138.73 per share in total dividends to shareholders – a significant increase from Sinovac's previously announced $55 per share dividend scheduled to be distributed on or about July 7, 2025.
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As a financial investor in Sinovac just like you, we welcome the idea of the Company distributing these significant dividends.
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However, we have serious doubts that the current Board will be able to deliver any further dividends to you.
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Don't Believe Empty Promises: Sinovac's Current Board Failed to Act Until it Was Pressured by Shareholders and Became Desperate to Win Your Votes to Retain Control of Sinovac
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Shareholders should not be fooled by the current Board's empty promises intended to protect the status quo and retain their positions. Sinovac's current directors – the majority of whom were not duly elected by shareholders – have offered up such large dividends only because their positions are on the line at the upcoming Special Meeting of Shareholders (the 'Special Meeting') to be held on July 8, 2025, and they are trying to buy shareholders' support.
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Further, the misleading dividend plan outlined by the current Board reveals its recklessness and its ignorance of the nature of Sinovac's business, the financial status of the Company, and the applicable PRC laws and regulations under which the Company operates:
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All of Sinovac's profits over the past several years were created by the former Board and management team. The current Board contributed nothing to the generation of the Company's profits.
The previously-announced $55 per share dividend – for which the current Board is seeking to take credit – was distributed from Sinovac's Chinese subsidiaries to the Company before 2025 by the former Board and was made ready for further distribution to shareholders by the former Board and management, not the current Board.
That dividend was originally withheld because of the chaos created by the lawsuit regarding the 2018 takeover of Sinovac's Board by representatives of minority shareholders 1Globe and Orbimed. The current Board only recently announced its plan to distribute the dividend once it faced public pressure from shareholders including SAIF Partners.
This chaotic lawsuit – led by the belligerent 1Globe and Orbimed group – has mired Sinovac in a series of legal battles that have left shareholders unable to trade the Company's stock or receive long-overdue dividend payments. If the current Board is not removed, we believe shareholders' capital will remain trapped within the Company indefinitely.
Further, under the current Board, Sinovac's independent auditor, Grant Thornton Zhitong Certified Public Accountants LLP ('Grant Thornton'), resigned on April 21, 2025, and since then the Company has operated without an auditor.
Given that Grant Thornton's resignation was prompted by the current Board's governance failures, we have good reason to believe that no auditor will work for Sinovac until there is a fundamental change in the Company's governance practices. We do not believe the current Board will be able to retain a new auditor given its long-term conflict with management and other shareholders.
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Given these realities, it appears to us that Sinovac's current Board has thrown out a massive dividend figure purely to win your votes – without consulting the people who run the Company, and without audited financial data required to make an informed judgement regarding the Company's capacity to pay dividends.
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The 1Globe and Orbimed Group Have Taken Reckless, Unethical and Illegal Actions to Take Control of Sinovac
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Sinovac operates within the highly regulated public health sector. It is critical that the Company maintains the highest respect for laws and ethics, requiring that it has principled, ethical leaders at its helm. However, the 1Globe and Orbimed group have employed a reckless approach and have previously acted with flagrant disregard for both professional ethics and applicable laws. For instance:
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In or about November 2018, Sinovac directors Mr. Pengfei Li and Mr. Jianzeng Cao – both directors nominated by 1Globe and Orbimed – were prohibited by the Hong Kong High Court from purporting to act or holding themselves out as Directors of Sinovac Hong Kong or its subsidiaries. The Hong Kong High Court found that Mr. Li and Mr. Cao forged documents and illegally filed them with the Hong Kong Companies Registry in an attempt to unlawfully remove Directors of Sinovac Hong Kong, and to deceive the Hong Kong Companies Registry into believing that the Board of Sinovac Hong Kong had been reconstituted.
In May of 2020, the U.S. Securities and Exchange Commission (the 'SEC') found that Dr. Chiang Li and 1Globe violated federal securities laws and regulations and imposed civil money penalties on them.
Specifically, the SEC found that by the end of 2017, 1Globe, Dr. Chiang Li and Dr. Chiang Li's relatives 'together held nearly one-third of the common stock of [Sinovac] and participated in an activist plan to replace four of five incumbent directors . . . at Sinovac's 2018 annual shareholder meeting.' 1Globe and Dr. Chiang Li, however, 'failed to disclose their full beneficial ownership of Sinovac stock, inclusive of substantial shares held by related parties, and their participation in a plan, led by other investors, thereby depriving existing and potential shareholders of information necessary to make fully informed investment decisions.'
Based on its findings, the SEC ordered that 1Globe and Dr. Chiang Li cease and desist from committing or causing any violations and any future violations of Sections 13(d)(1) and 13(d)(2) of the Exchange Act and Rules 13d–1 and 13d–2 thereunder. The SEC also imposed civil penalties on both 1Globe and Dr. Chiang Li, with 1Globe agreeing to pay USD $200,000 and Dr. Chiang Li agreeing to pay USD $90,000 in civil money penalties.
In or about February 2024, it was reported that Shandong Sinobioway Biomedicine Co., Ltd. ('Shandong Sinobioway', a public listed company in the PRC), had received a criminal judgment from the People's Court of Zhangdian District, Zibo City, Shandong Province ('Shandong Court'), in which Mr. Pengfei Li was one of the named defendants. Mr. Pengfei Li is the CEO of 1Globe China, and it is believed he committed the criminal behaviors as part of 1Globe's scheme to take control of Sinovac and its subsidiaries.
The Shandong Court found that Mr. Pengfei Li had committed the crimes of embezzlement, forging government documents and seals, and forging company seals, and sentenced him to eight years in prison and ordered that he pay a fine of RMB 780,000.
In addition, the Shandong Court ruled that Hangzhou Qiangxin Biotechnology Co., Ltd., a Chinese subsidiary of 1Globe, had illegally acquired a 34% equity interest in Sinobioway Biomedicine Co., Ltd., a wholly owned subsidiary of Shandong Sinobioway and the minority shareholder of Sinovac's Beijing joint venture.
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Given these unscrupulous behaviors over a long period of time, we strongly doubt that the current Board will ever be able to build the internal and external support to effectively oversee Sinovac, maintain financial discipline, and pay the significant dividends it has promised to you in an effort to win your vote.
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A New Board is Immediately Needed to Restore Sinovac's Credibility and Maximize Shareholder Value
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We believe that immediate change is needed on Sinovac's Board to unlock the tremendous value embedded in the Company for all shareholders. To that end, we have nominated ten highly qualified director candidates for election to the Board at the upcoming Special Meeting who are committed to resolving Sinovac's legal disputes, retaining a new independent auditor, and taking the steps necessary to deliver value to all shareholders, including:
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Immediately paying out the long-scheduled USD $55 per share dividend to shareholders;
Ending the six-year trading halt of Sinovac's common shares, which has left the stock at a price of $6.47 per share – reflecting only a fraction of the Company's current value;
Paying shareholders further dividends based on the Company's audited financial accounts.
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If elected, SAIF's nominees – who include Sinovac's founder and current CEO – will bring extensive industry knowledge, management experience, and shareholder alignment to the Board, and work closely with management to bring disciplined corporate governance, proper capital allocation, strategic foresight and operational excellence to the Company.
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SAIF Partners urges all Sinovac shareholders to vote the GOLD Proxy Card 'FOR' the removal of the current Board and 'FOR' the election of our ten highly qualified director nominees to the Board at the Special Meeting of Shareholders.
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Now is Your Chance to Elect a Board that Will Act in the Best Interest of ALL Sinovac Shareholders
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SAIF Partners is a leading Asian private equity firm with cumulative assets under management of over $4 billion. SAIF Partners is an active lead investor working closely with its portfolio companies to develop their business both organically and through acquisitions, seeking synergistic cooperation among them, as well as enhancing shareholder value via promotion of good corporate governance and best management practices.
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Additional Information and Where to Find it
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This communication may be deemed to be solicitation material in respect of SAIF Partners' nomination of ten director nominees to Sinovac's Board. In connection with such solicitation, SAIF Partners mailed the definitive proxy statement and proxy card to shareholders of Sinovac with respect to the Special Meeting to be held in connection with the election of directors to Sinovac's Board. The definitive proxy statement mailed by SAIF Partners is also filed as Exhibit 1 to its Schedule 13D/A filed on or about June 16, 2025. SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE SINOVAC SPECIAL MEETING, INCLUDING ANY DOCUMENT INCORPORATED BY REFERENCE THEREIN, CAREFULLY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE DIRECTOR NOMINEES AND THE SPECIAL MEETING AND RELATED MATTERS. Sinovac's shareholders may obtain, free of charge, the definitive version of the proxy statement, any amendments or supplements thereto, and any other relevant documents mailed by SAIF Partners in connection with the Special Meeting at proxyvoting.com/SVA/documents.
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Contacts
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Media Contacts
Jonathan Gasthalter/Mark Semer/Grace Cartwright
Gasthalter & Co.
[phone]
[e-mail]
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