Cordlife announces arrest of one more director amid investigations into mishandling of cord blood units

SINGAPORE: Another Cordlife director has been arrested amid investigations into the company's mishandling of cord blood units.

According to a bourse filing on Sunday (May 19), Ms Chen Xiaoling, a non-independent non-executive director on the Cordlife board, was arrested and released on bail after attending an interview at the office of the Singapore Police Force's Commercial Affairs Department (CAD) on Wednesday. 

This is the eighth arrest linked to the case that has been announced by the company.

"The company understands that the offence for which she 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," said Cordlife.

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.

Ms Chen was one of four directors not based in Singapore who were required to attend police interviews on Apr 2. The other three were former chairman Joseph Wong Wai Leung, Mr Zhai Lingyun and Mr Yiu Ming Yiu.

Cordlife said it was informed that Ms Chen had previously obtained the CAD's agreement to postpone her interview to May 21.

According to Cordlife's website, Ms Chen was appointed as a director of the company on Dec 1, 2021, and was last re-elected on Apr 29, 2022.

She is a nominee director of Nanjing Xinjiekou Department Store, which has a 20.3 per cent stake in Cordlife, holding senior assistant president and senior director roles in the Shanghai Stock Exchange-listed company.

Ms Chen is also a member of the Shandong Cord Blood Bank's board of supervisors and a member of the boards of Findgene and Dendreon US, the Cordlife website said.

In its filing, Cordlife said that Ms Chen will retain her role on its board.

"Given that Ms Chen will be 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 – with Ms Chen recusing herself from deliberations and decisions of the board on this matter – is of the view that it would be in the interests of the company for Ms Chen to continue serving on the board," said Cordlife.

"The board will continue to consider and assess the suitability of Ms Chen to continue serving on the board, pending the development of the investigations."

Besides Ms Chen, the seven other Cordlife-linked individuals arrested and released on bail in connection with the case are: Former group CEO Tan Poh Lan, chief financial officer Thet Hnin Yi, acting chairman Ho Choon Hou, independent directors Yeo Hwee Tiong and Titus Jim Cheong Tuck Yan, non-independent non-executive director Chow Wai Leong and Mr Yiu, who is another non-independent non-executive director.

The company 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.

The damaged cord blood units were from one tank that belonged to 2,150 customers. 

The remaining six tanks were sent for further tests and the final results to determine the viability of mishandled cord blood units were estimated to be ready by end-March, MOH said previously. This was due partly to capacity constraints at a third-party laboratory conducting the tests.

"Preliminary investigations show that two of the six affected tanks, which stored about 2,300 cord blood units, were unlikely to be adversely affected by the temperature excursions," MOH said in January.

MOH also announced in April that about 5,300 cord blood units stored in a second Cordlife tank and a dry shipper had been deemed "non-viable".

In December 2023, Cordlife said it would accept a six-month suspension given by the ministry.

The company is required to rectify a list of potential non-compliances by May 31. These include ineffective incident reporting frameworks, inadequate training and competence of staff and the inappropriate storage of cord blood units, among others.

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.