Beijing, April 22, 2025 (GLOBE NEWSWIRE) -- To the Shareholders of Sinovac Biotech Ltd. and Other Stakeholders:
The management of Sinovac Biotech Ltd. (NASDAQ:SVA, "SINOVAC" or the "Company")) 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, 2025, stating that "the current members of the Board 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. As a result of the resignation, the Company will not be able to meet the deadline to file its Form 20-F annual report with the U.S. Securities and Exchange Commission ("SEC"), which is due by April 30, 2025.
This development is deeply concerning, as it reflects that the actions taken by the current Board have caused disruption to the Company's compliant operations and governance. 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. Of the five directors recently disclosed, only three 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.
While we respect the ruling of the UK Privy Council, we, as the Company's management, believe that maintaining the stability and orderly operation of the Company is in the best interests of all shareholders and stakeholders. 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. The management team supports the distribution of cash dividends to shareholders, which would not have been possible without the initiatives and achievements of the former board. 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. The auditor's resignation and the resulting delay of the Form 20-F filing are unfortunate illustrations of the damage such instability can cause.
At this critical juncture, given 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, for the Company's continued operations and long-term stability, we call on all shareholders for cooperation, coordination, and a forward-looking perspective. We believe a shareholder meeting should be held as soon as practicable to elect a new Board that can provide the strong, stable, and legitimate leadership SINOVAC needs to move forward. In the meantime, we also call for and support the prompt reinstatement of normal trading of the Company's shares.
As the management team of a publicly traded company, we have a fiduciary duty to act in the best interests of all shareholders. In light of recent developments, we believe it is our responsibility to issue this public statement to ensure transparency and to keep shareholders and stakeholders fully informed of these important matters.
We remain committed to serving the long-term interests of SINOVAC and all its shareholders. For the Company's compliant operations and governance, we will actively facilitate the engagement of a new independent registered public accounting firm.
– Management of SINOVAC
April 22, 2025, Beijing
Management of SINOVAC Sinovac Holding Group Co., Ltd. +86(010)82799800 [email protected]