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The Committee for China Cord Fairness Has Received Shareholder Support for Governance Changes at Global Cord Blood Corporation

November 26, 2019

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