Sinovac Biotech (SVA, Financial) has announced that its external auditor has stepped down from conducting the company's year-end audit for fiscal year 2024. This decision stems from an ongoing review initiated by the current Board regarding actions taken by the former board of directors after the latter relinquished control. This review has raised concerns for the auditor about the reliability of the foundation upon which their audit opinion would be based.
As a direct consequence of the auditor's resignation, Sinovac will miss the deadline to file its Form 20-F annual report with the U.S. Securities and Exchange Commission, which is due by April 30, 2025. This disruption highlights issues in the company’s governance and operational compliance.
The Board's decision to reassess corporate actions links back to a UK Privy Council ruling from January 2025, which confirmed the validity of the director slate elected by shareholders at the 2018 Annual General Meeting. However, the current Board only partially reflects that slate, with three of the five current directors coming from it. Notably, one of these directors is presently detained due to convictions for various financial crimes.
Several shareholders have voiced doubts about the current Board’s qualifications and legitimacy. Despite respecting the Privy Council's decision, Sinovac’s management stresses the importance of stability and continuity, achieved under the former board’s leadership, which fostered significant growth and market expansion.
Amid these developments, Sinovac’s management advocates for a shareholder meeting to elect a new Board to ensure stable and legitimate leadership. They also support resuming regular trading of Sinovac shares. Management remains committed to transparency and engaging a new independent auditing firm promptly to safeguard the interests of all shareholders.
