China Biologic Products Responds to Allegations on Financial Websites
Jan 27, 2010
TAI'AN, China, Jan. 27 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO) ("China Biologic," or the "Company"), one of the leading plasma-based biopharmaceutical companies in China, today responded to allegations regarding the Company, certain members of its Board of Directors and a significant employee in an article that appeared on several online financial websites.
The article, which was written by an investor who disclosed a short position in the Company, highlighted the circumstances surrounding a RMB20 million loan from one of the Company's founding shareholders, Beijing Chen Da Scientific Investment Co, to Dr. Zuying Du, the transfer of Dr. Du's 25% equity ownership of the Company's predecessor, Shangdong Missile Biological Products Co., and allegations of fraud and criminal activity by Mr. Tung Lam, CEO of the Company's primary operating subsidiary, Shandong Taibang, and by the husband of the Company's director, Ms. Li Lin Ling, occurring prior to 2005. The article also included references to what are purported to be official documents supporting the allegations.
The circumstances surrounding the Company's formation, including the various legal proceedings have been disclosed in the Company's public filings with the US Securities and Exchange Commission ("SEC"). In particular, the legality of the equity transfer among the original founders has been confirmed by various PRC courts and has withstood several appeals by Dr. Du. Furthermore, in early 2007, the Company engaged Control Risks Group, a private risk consultancy firm specializing in investigative services, to conduct a general independent investigation into the background of the Company's officers, directors and control persons, and no misconduct was found. The Company believes that this is an attempt to discredit the Company's management and disrupt the Company's business and operations.
After consultation with legal counsel and the members of the audit committee, the Board of Directors has established a special independent subcommittee comprised of audit committee chair, Mr. Sean Shao, and independent director, Dr. Tong Jun Lin, to investigate the additional allegations and report back to the Board of Directors. The subcommittee has also been authorized to seek out and retain a reputable international firm to assist in the investigation and report its findings to the subcommittee as soon as practicable.
"The Board takes these allegations seriously and plans to thoroughly investigate these issues using an independent third party," said Mr. Sean Shao, Chairman of China Biologic's audit committee. "We remain dedicated to providing the highest standards of oversight and governance to our shareholders and will work diligently to conclude the investigation in a timely manner."
The article also speculates on the recent departure of one of the Company's independent directors, Dr. Jie Gan, who resigned in mid January. As disclosed in the Company's SEC filings, Dr. Gan's resignation was not because of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Rather, Dr. Gan's personal and professional activities occupied an increasing amount of her time and in the end, she decided that it would be in the best interest of the Company and its shareholders if she were to resign and have someone else appointed to her position. The Company is actively searching for candidates to fill the vacancy left by Dr. Gan's departure.
About China Biologic Products, Inc.
China Biologic Products, Inc. (the "Company"), through its indirect majority-owned subsidiaries, Shandong Taibang Biological Products Co. Ltd. and Guiyang Dalin Biologic Technologies Co., Ltd, and its equity investment in Xi'an Huitian Blood Products Co., Ltd., is currently the largest non-state-owned plasma-based biopharmaceutical company in China. The Company is a fully integrated biologic products company with plasma collection, production and manufacturing, research and development, and commercial operations. The Company's plasma-based biopharmaceutical products are irreplaceable during medical emergencies, and are used for the prevention and treatment of various diseases. The Company sells its products to hospitals and other healthcare facilities in China.
Safe Harbor Statement
This release may contain certain "forward-looking statements" relating to the business of China Biologic Products, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the outcome of the investigation by the special subcommittee of the board of directors; the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, and involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov/). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact: Company Contact: Mr. Y. Tristan Kuo Chief Financial Officer China Biologic Products, Inc. Phone: +86-538-6202206 Email: IR@chinabiologic.com Web: http://www.chinabiologic.com/ Investor Relations Contact: CCG Investor Relations Ms. Elaine Ketchmere, Partner Phone: +1-310-954-1345 Email: firstname.lastname@example.org Mr. Crocker Coulson, President Phone: +1-646-213-1915 Email: email@example.com Web: http://www.ccgirasia.com/
SOURCE: China Biologic Products, Inc.
CONTACT: Y. Tristan Kuo, Chief Financial Officer, +86-538-6202206,
IR@chinabiologic.com, of China Biologic Products, Inc.; Investor Relations
Contact: Elaine Ketchmere, Partner, +1-310-954-1345,
firstname.lastname@example.org, or Crocker Coulson, President, +1-646-213-1915,
email@example.com, both of CCG Investor Relations