China Biologic Products Responds to Allegations on Financial Websites
January 27 2010 - 9:00AM
PR Newswire (US)
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: Web: http://www.chinabiologic.com/ Investor
Relations Contact: CCG Investor Relations Ms. Elaine Ketchmere,
Partner Phone: +1-310-954-1345 Email: Mr. Crocker Coulson,
President Phone: +1-646-213-1915 Email: Web:
http://www.ccgirasia.com/ DATASOURCE: China Biologic Products, Inc.
CONTACT: Y. Tristan Kuo, Chief Financial Officer, +86-538-6202206,
, of China Biologic Products, Inc.; Investor Relations Contact:
Elaine Ketchmere, Partner, +1-310-954-1345, , or Crocker Coulson,
President, +1-646-213-1915, , both of CCG Investor Relations Web
site: http://www.chinabiologic.com/ http://www.ccgirasia.com/
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