NEW YORK, Nov. 26, 2019 /PRNewswire/ -- The Committee for
China Cord Fairness (the "Committee") today announced that it has
received and delivered consents representing more than 73% of the
shares of Global Cord Blood Corporation (NYSE: CO) ("Global
Cord" or the "Company") held by the Company's minority shareholders
in support of the Committee's proposal that any business
transaction will be conditioned on the approval of the majority of
the minority shareholders. The Committee expects Global Cord's
Board of Directors (the "Board") to promptly confirm that it will
comply with the clear wishes of the majority of the minority
shareholders by approving such proposal. Additionally, the
Committee delivered consents representing more than 58% of the
shares of the Company held by the Company's minority shareholders
in support of the Committee's five other corporate governance
proposals. According to the Committee's proxy solicitor, D.F. King
& Co., 73.04% of the minority shareholders of the Company
participated in the consent solicitation; the minority shareholders
include all of the Company's shareholders, excluding the Company's
majority shareholder, Sanpower Group Corporation (the "Majority
Shareholder"), and members of the management team.1
The Committee appreciates the support it received from its
fellow minority shareholders in its solicitation efforts to send a
clear message to the Board that the minority shareholders demand
governance changes and will not sit silently by while
non-independent directors contemplate any transactions with the
Majority Shareholder or any member of the management team. The
results of the consent solicitation have been verified by D.F. King
& Co., who will be providing the official results of the
consent solicitation at the following website
www.chinacordfairness.com.
The results of the consent solicitation with respect to each of
the proposals were as follows:
1. To demand that the Board take all necessary steps
in its power to condition the completion
of any business transaction upon the
un-coerced, informed vote of a majority of the
unaffiliated minority shareholders
of the Company:
|
|
Consent
|
Withhold
Consent
|
Abstain
|
|
|
25,363,316
|
3,426
|
2
|
|
|
|
|
|
2. To demand that the Board immediately retain an
independent international investment
banking firm to conduct a fair and
transparent review of strategic alternatives to maximize
value for all shareholders:
|
|
Consent
|
Withhold
Consent
|
Abstain
|
|
|
20,275,351
|
5,091,393
|
0
|
|
|
|
|
|
3. To demand that the Board take all necessary steps
in its power to require the approval of a
majority of the unaffiliated
minority shareholders before consummating any material
acquisition:
|
|
Consent
|
Withhold
Consent
|
Abstain
|
|
|
20,369,182
|
4,979,562
|
18,000
|
|
|
|
|
|
4. To demand that the Board take all necessary steps
in its power to change the Company's
executive compensation program to
include metrics that more directly align management
incentives with shareholder value
enhancement, such as stock price:
|
|
Consent
|
Withhold
Consent
|
Abstain
|
|
|
24,220,071
|
1,146,667
|
6
|
|
|
|
|
|
5. To demand that the Board take all necessary steps
in its power to require henceforth that
the Chair of the Board be an
independent member of the Board:
|
|
Consent
|
Withhold
Consent
|
Abstain
|
|
|
24,198,651
|
1,149,591
|
18,502
|
|
|
|
|
|
6. To demand that the Board take all necessary steps
in its power to provide and maintain a
stable and consistent dividend
policy:
|
|
Consent
|
Withhold
Consent
|
Abstain
|
|
|
20,278,775
|
5,087,869
|
100
|
|
|
|
|
|
Given the results of the consent process, the Committee wants to
make it abundantly clear that any use of the Company's cash for any
business transactions or material acquisitions should absolutely be
conditioned on approval by a majority of the minority shareholders.
This is imperative as the Committee notes that one of the Company's
most valuable assets is its $700+ million cash on the balance
sheet. Implementing this recommended safeguard will ensure that
there is no cash leakage if the Company were to buy any overpriced
assets by means of a related party transaction with either the
Majority Shareholder or members of the management team. The
Committee believes any such wealth transfers to the detriment of
the minority shareholders would be an obvious breach of the Board's
fiduciary duties.
Furthermore, in addition to the majority of minority
shareholders, leading proxy advisory firm, Institutional
Shareholder Services Inc. ("ISS"), recently announced its
recommendation in support of the proposal that the Board take all
necessary steps to change the Company's executive compensation
program to include metrics that more directly align management
incentives with shareholder value enhancement, such as stock price.
The Company's recent underperformance and the discretionary nature
of its short-term incentive program must be addressed by having the
Compensation Committee of the Board respond to both shareholder and
ISS concerns and provide pre-set performance criteria for
executives' incentive pay.
The Committee expects that the Board will take into account the
clear requests of its minority shareholders and take the necessary
steps to align its corporate governance with best practices and
approach any and all transactions with the sole purpose of
maximizing value for all shareholders.
For further information:
The results of the consent solicitation, consent solicitation
materials, as well as previous letters and communications
concerning the shareholders' interests, and the ongoing litigation
in the Cayman Islands involving
the Company, can be found at the website
www.chinacordfairness.com.
INVESTOR CONTACT:
Richard Grubaugh /Peter Aymar
D.F. King & Co.
212-269-5550
chinacordfairness@dfking.com
1 The number of minority shares outstanding is
calculated based on publicly available information from the
Company's filings; the total shares outstanding, 121,551,075, less
the shares of the Majority Shareholder, 79,528,662, and the shares
of management, 7,290,367.
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SOURCE The Committee for China Cord Fairness