Another Cordlife director arrested amid investigations into mishandling of cord blood units

SINGAPORE: Another director at Cordlife has been arrested amid investigations into the company’s mishandling of cord blood units, bringing the total number of arrests in connection with the case to nine.

In a bourse filing on Monday (Jul 29), the company said one of its directors, Mr Zhai Lingyun, was arrested on Jul 25 and released on bail, after attending an interview with the police's Commercial Affairs Department (CAD). 

Cordlife previously announced Mr Zhai, a non-independent non-executive director on the company's board, was required to attend an interview with the CAD but it had been pushed back.  

Seven of Cordlife's storage tanks were exposed to temperatures above acceptable limits, damaging cord blood units belonging to at least 2,150 clients. Another 17,000 clients were possibly affected.

"The company understands that the offence for which he was arrested and released on bail, is likewise 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. 

Non-independent non-executive directors Ms Chen Xiaoling, Mr Yiu Ming Yiu and Mr Chow Wai Leong, Cordlife's Chief Financial Officer Ms Thet Hnin Yi, the company's former Group CEO Tan Poh Lan, acting chairman Ho Choon Hou as well as independent directors Yeo Hwee Tiong and Titus Jim Cheong Tuck Yan were previously arrested and released on bail. 

Another director and former chairman Joseph Wong Wai Leung was required to attend a police interview in April, but he informed the CAD he was unable to do so due to health reasons and was "uncertain on the next interview date pending the CAD's agreement". 

According to Cordlife’s website and a separate bourse filing, Mr Zhai was first appointed a non-independent non-executive director of the company in Dec 2019 and was last re-elected in April 2023.

He is also the chairman of Dendreon Pharmaceuticals, an immunotherapy company based in California, and Shandong Cord Blood Bank, a cord blood stem cell preservation company based in China. 

In its filing, Cordlife said that Mr Zhai would retain his position on its board as he 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 (MOH) in relation to the company's Singapore operations. 

“The board will continue to consider and assess the suitability of Mr Zhai to continue serving on the board, pending the development of the investigations,” it added. 

Cordlife also said it is in the process of identifying additional independent directors to strengthen the capabilities of its board, and to guide management on rectifying the company's lapses and address corporate governance issues.  

The private cord blood bank will monitor the progress of the investigations and will cooperate fully with all regulatory authorities, it said, adding that the group's operations will "continue to operate as usual".

MISHANDLING OF CORD BLOOD UNITS

The mishandling of cord blood units was made public on Nov 30, 2023, when MOH announced that investigations against the private cord blood bank were ongoing.

The ministry had received a complaint from a member of the public on Jul 24, 2023, about alleged issues with a storage tank.

It later emerged that Cordlife's board knew of the issue months earlier, in February 2023.

About 5,300 cord blood units stored in a second Cordlife tank and a dry shipper were deemed "non-viable", MOH said in April.

This is on top of the roughly 2,200 cord blood units that were damaged in the first tank, affecting at least 2,150 clients. 

While MOH said the remaining five tanks had been assessed to be at low risk, MOH experts recommended that Cordlife test a large number of cord blood units in these five tanks to achieve more statistically significant results – 99 per cent of the samples tested must pass both potency and viability tests.

Cordlife has agreed to test more than 200 more samples across the five tanks and will review the outcome of the test results with MOH experts, with the tests "to take approximately another year" to complete.

The company will inform these clients of the outcome of the tests in batches.

In December last year, Cordlife said it would accept a six-month suspension given by the ministry for the collection, testing, processing and/or storage of any new cord blood and human tissues, or providing any new types of tests to patients.

The firm’s suspension had been due to end on Jun 15, but the company announced in late May that the suspension was further extended for up to three months. 

Its cellular therapy accreditation has also been indefinitely suspended by the Foundation for the Accreditation of Cellular Therapy, a global non-profit corporation which conducts inspections and accreditation in cellular therapy.