Vivo Capital has initiated several legal challenges to counter the actions of the current board of Sinovac Biotech (SVA, Financial), which is under the influence of activist investor 1Globe Capital LLC. Vivo Capital accuses the board of undermining shareholder interests and destabilizing the company.
In January 2025, a legal directive from the Judicial Committee of the Privy Council in London retroactively replaced four Sinovac board members with 1Globe-nominated individuals from February 2018. Vivo claims these new members have prioritized 1Globe's interests and have moved to entrench their control over the board. Key actions include resisting shareholder calls for meetings and board elections, proposing the cancellation of significant portions of Sinovac’s common stock, and appointing additional 1Globe affiliates to the board. These moves have excluded Vivo’s board representative, Shan Fu, from all board matters.
The ensuing governance crisis led to the resignation of Grant Thornton Zhitong Certified Public Accountants LLP, Sinovac’s independent auditor, who stated that past board resolutions and management representations were no longer reliable for auditing purposes. The company continues to struggle in finding a replacement auditor, a delay that risks non-compliance with U.S. securities laws and impacts the potential resumption of its stock trading on the NASDAQ, which has been halted since 2019.
To rectify these issues, Vivo Capital has filed lawsuits in various courts including the Antigua and Barbuda High Court, New York's Supreme Court, and the U.S. District Court in Massachusetts, aiming to invalidate the board's controversial actions and seek adherence to U.S. securities laws. Vivo also calls for shareholder support and open discussions with 1Globe to resolve ongoing issues, emphasizing the need for a special meeting to elect a new board dedicated to all shareholder interests and the company's broader objectives.
