SINGAPORE – Cordlife’s former group chief executive Tan Poh Lan and four board members have been arrested for potential breaches of the company’s disclosure obligations in relation to its mishandling of cord blood units.
The listed private cord blood bank has been under scrutiny since the Ministry of Health made public on Nov 30, 2023, that seven of its tanks storing cord blood units were exposed to temperatures above acceptable limits.
Cord blood units belonging to at least 2,150 clients were damaged, with 17,050 others potentially affected.
It later emerged that Cordlife’s board was alerted to temperature lapses in one of its tanks in February 2023.
The four directors who were arrested along with Ms Tan are acting chairman Ho Choon Hou, independent directors Yeo Hwee Tiong and Titus Jim Cheong Tuck Yan, as well as non-independent non-executive director Chow Wai Leong.
All five are out on bail.
In a bourse filing in the wee hours of March 22, the company said it had received a notice on March 19 from the Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) requiring documents and information related to police investigations into an offence under the Securities and Futures Act.
It has produced some of the documents listed in the notice.
“The company understands that the offence is in connection with potential breaches of the disclosure obligations of the company in relation to the irregular temperatures of a certain cryogenic storage tank of the company, which was first disclosed by the company in its announcement dated Nov 30, 2023,” Cordlife said in the filing.
Its chief financial officer Thet Hnin Yi has been asked to assist with investigations. She has not been arrested, the company said.
The CAD and MAS also issued a notice on March 19 requiring four directors of the company who are not based in Singapore to attend interviews on April 2 in connection with the investigations.
They are independent director Joseph Wong Wai Leung, non-independent non-executive director Zhai Lingyun, non-independent non-executive director Chen Xiao Ling and non-independent non-executive director Yiu Ming Yiu.
“The company has received undertakings from all the directors, Ms Tan Poh Lan and Ms Thet Hnin Yi, to inform the board of the ongoing investigations and subsequent developments,” said Cordlife.
Ms Tan resigned in October 2023 to “pursue personal interests”, before the case was made known in November that year. The company announced on Feb 19 that it had appointed Mr Yiu Pang Fai as its next group CEO.
Ms Tan’s last day as group CEO and executive director was previously announced as March 31. But she and the company later agreed that Feb 19 would be her last day, although she will work with Mr Yiu until March 31 to facilitate the smooth transition of leadership.
As for the directors, Cordlife said: “Given that the current board has been overseeing and providing guidance on the ongoing work undertaken by the company to investigate and address the lapses identified by the Ministry of Health in relation to the company’s Singapore operations, the majority of the board is of the view that it would be in the interests of the company for all directors to continue serving on the board,” the company added.
However, it disclosed that Mr Zhai and Ms Chen disagree, as they hold the view that their fellow directors who have been arrested and released on bail are not suitable to remain on the board.
In an earlier bourse filing on March 21, the company said its shareholders had requested the removal and appointment of several directors amid the mishandling of the cord blood units.
“The board will continue to consider and assess the suitability of all directors to continue serving on the board, pending the development of the investigations,” said Cordlife.
It added that, depending on how the investigation evolves, the board will also consider the possibility of the appointment of new independent directors to serve as additional checks and balances for the company.
Cordlife said the group’s operations will continue as usual.
The company’s share price was down 2.2 per cent to 22 cents as at 9.19am on March 22. Trading in the counter resumed on March 22, after being halted from the afternoon of March 14.