Nanjing Xinjiekou Department Store Co., Ltd., along with Cordlife’s non-independent non-executive directors Zhai Lingyun and Chen Xiaoling, have filed an application before the High Court against Cordlife Group and several of its directors, to prevent the latter from issuing or allotting any shares under the private placement proposed by Cordlife.
Nanjing Xinjiekou is the controlling shareholder of Cordlife. Cordlife’s acting chairman and non-independent non-executive director, Dr Ho Choon Hou; independent directors Yeo Hwee Tiong, Cheong Tuck Yan Titus Jim; non-independent non-executive directors Yiu Ming Yiu and Chow Wai Leong; as well as group CEO Ivan Yiu Pang Fai were named in the court application.
The suit invoked several sections of the Companies Act 1967, including section 409A(1) and section 157 of the Companies Act 1967. Section 409A(1) lets the Act issue injunctions when a person has “engaged, is engaging or is proposing to engage in any conduct” that would affect the claimant’s interests. Section 157 of the Act refers to the duty and liability of officers, where a director must “at all times act honestly and use reasonable diligence in the discharge of the duties of his or her office”.
Pending the hearing of the application, the claimants filed to seek an interim injunction restraining the defendants from engaging in conduct that goes against Section 157 of the Act, which includes the private placement. The interim injunction was granted on April 19.
In its statement dated April 22, Cordlife says that is currently seeking legal advice.
Cordlife’s shares last traded at 14.8 cents.
