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The article, which was written by an investor who disclosed a shortposition in the Company, highlighted the circumstances surrounding a RMB20million loan from one of the Company's founding shareholders, Beijing Chen DaScientific Investment Co, to Dr. Zuying Du, the transfer of Dr. Du's 25%equity ownership of the Company's predecessor, Shangdong Missile BiologicalProducts Co., and allegations of fraud and criminal activity by Mr. Tung Lam,CEO of the Company's primary operating subsidiary, Shandong Taibang, and bythe husband of the Company's director, Ms. Li Lin Ling, occurring prior to2005. The article also included references to what are purported to beofficial documents supporting the allegations.
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The circumstances surrounding the Company's formation, including thevarious legal proceedings have been disclosed in the Company's public filingswith the US Securities and Exchange Commission ("SEC"). In particular, thelegality of the equity transfer among the original founders has been confirmedby various PRC courts and has withstood several appeals by Dr. Du. Furthermore,in early 2007, the Company engaged Control Risks Group, a private riskconsultancy firm specializing in investigative services, to conduct a generalindependent investigation into the background of the Company's officers,directors and control persons, and no misconduct was found. The Companybelieves that this is an attempt to discredit the Company's management anddisrupt the Company's business and operations.
After consultation with legal counsel and the members of the auditcommittee, the Board of Directors has established a special independentsubcommittee comprised of audit committee chair, Mr. Sean Shao, andindependent director, Dr. Tong Jun Lin, to investigate the additionalallegations and report back to the Board of Directors. The subcommittee hasalso been authorized to seek out and retain a reputable international firm toassist in the investigation and report its findings to the subcommittee assoon as practicable.
"The Board takes these allegations seriously and plans to thoroughlyinvestigate these issues using an independent third party," said Mr. Sean Shao,Chairman of China Biologic's audit committee. "We remain dedicated toproviding the highest standards of oversight and governance to ourshareholders and will work diligently to conclude the investigation in atimely manner."
The article also speculates on the recent departure of one of theCompany's independent directors, Dr. Jie Gan, who resigned in mid January. Asdisclosed in the Company's SEC filings, Dr. Gan's resignation was not becauseof any disagreement with the Company on any matter relating to the Company'soperations, policies or practices. Rather, Dr. Gan's personal and professionalactivities occupied an increasing amount of her time and in the end, shedecided that it would be in the best interest of the Company and itsshareholders if she were to resign and have someone else appointed to herposition. The Company is actively searching for candidates to fill the vacancyleft by Dr. Gan's departure.
About China Biologic Products, Inc.
China Biologic Products, Inc. (the "Company"), through its indirectmajority-owned subsidiaries, Shandong Taibang Biological Products Co. Ltd. andGuiyang Dalin Biologic Technologies Co., Ltd, and its equity investment inXi'an Huitian Blood Products Co., Ltd., is currently the largestnon-state-owned plasma-based biopharmaceutical company in China. The Companyis a fully integrated biologic products company with plasma collection,production and manufacturing, research and development, and commercialoperations. The Company's plasma-based biopharmaceutical products areirreplaceable during medical emergencies, and are used for the prevention andtreatment of various diseases. The Company sells its products to hospitals andother healthcare facilities in China.
Safe Harbor Statement
This release may contain certain "forward-looking statements" relating tothe 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 ofthe investigation by the special subcommittee of the board of directors; theability of the Company to achieve its commercial objectives; the businessstrategy, plans and objectives of the Company and its subsidiaries; and anyother statements of non-historical information. These forward-lookingstatements are often identified by the use of forward-looking terminology suchas "believes," "expects" or similar expressions, and involve known and unknownrisks and uncertainties. Although the Company believes that the expectationsreflected in these forward-looking statements are reasonable, they do involveassumptions, risks and uncertainties, and these expectations may prove to beincorrect. Investors should not place undue reliance on these forward-lookingstatements, which speak only as of the date of this press release. TheCompany's actual results could differ materially from those anticipated inthese forward-looking statements as a result of a variety of factors,including those discussed in the Company's periodic reports that are filedwith the Securities and Exchange Commission and available on its website(http://www.sec.gov). All forward-looking statements attributable to theCompany or persons acting on its behalf are expressly qualified in theirentirety 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: [email protected] Web: http://www.chinabiologic.com Investor Relations Contact: CCG Investor Relations Ms. Elaine Ketchmere, Partner Phone: +1-310-954-1345 Email: [email protected] Mr. Crocker Coulson, President Phone: +1-646-213-1915 Email: [email protected] Web: http://www.ccgirasia.com
SOURCE China Biologic Products, Inc.
