Sinovac Biotech Ltd. (NASDAQ: SVA), a prominent player in China's biopharmaceutical sector, has entered a defining phase in its corporate history. As the company prepares to file definitive proxy materials with the U.S. SEC for a Special Meeting of Shareholders scheduled on July 9, 2025, it has launched a comprehensive counteroffensive against a rival investor group seeking to unseat its current Board.

At the centre of this dispute lies a high-stakes proxy battle, underpinned by years of corporate unrest, conflicting claims to legitimacy, and the control of more than $2 billion in previously distributed dividends.

The Crux of the Conflict

The controversy traces back to a 2018 PIPE transaction—a private investment in public equity—initiated under what Sinovac’s current Board calls an “Imposter Board.” Despite being removed by shareholder vote in 2018, the former board continued to act in office and allegedly distributed US$2 billion in dividends to its backers, including Prime Success and Vivo Capital, now collectively known as the Dissenting Investor Group.

A landmark UK Privy Council ruling in January 2025 confirmed the illegitimacy of that board and upheld the rightful authority of the current Sinovac Board, supported by 1Globe Capital (Sinovac’s largest minority shareholder) and OrbiMed.

The Board’s Response and Defensive Measures

In a letter to shareholders, Sinovac’s Board characterizes the Dissenting Investor Group’s attempt to call a shareholder meeting and replace the Board with its own nominees (the “Dissident Slate”) as a "hostile, self-serving move" that threatens the interests of legitimate shareholders.

The Board's defence is not merely legal—it is financial and moral:

• US$55.00 Per Share Dividend: Declared in April 2025, this dividend represents an attempt to redress the imbalance created by years of unilateral cash outflows to the Dissenting Group.

• US$11.00 Per Share Redistribution Plan: The Board pledges to return an additional amount once the PIPE shares—deemed unauthorized—are cancelled.

• Future Dividend Commitment: The Board is committed to regular, pro-rata dividends from Sinovac’s operating subsidiaries to all rightful shareholders.

• Regaining NASDAQ Compliance: After years of governance uncertainty, the current Board is working to restore transparency and trading through independent auditing and corrective action.

• Exploring Dual Listing in Hong Kong: To enhance investor confidence and stability, the Board is evaluating strategic listing alternatives.

Risks If the Dissident Slate Wins Control

If the Dissident Slate is successful, Sinovac warns of a return to opaque governance practices, misappropriation of shareholder value, and reversal of transparency reforms. Key risks include:

• Cancellation or indefinite delay of the US$55.00 dividend

• No payout of the US$11.00 redistribution, leaving PIPE-linked gains intact

• Renewed efforts at undervalued privatization

• Investment of corporate cash into conflicted VC funds affiliated with Vivo Capital

• Ongoing litigation, misinformation, and delay tactics aimed at eroding confidence and transparency

• Continued trading halt on NASDAQ due to unresolved audit concerns tied to the prior board’s control

Key Stakeholders Weigh In

Dr. Chiang Li, founder of 1Globe Capital and current Chairman of the Board, publicly rejected his own nomination on the Dissident Slate, reinforcing his commitment to Sinovac’s legitimate governance.

Dr. Li, who personally financed the legal battle culminating in the Privy Council’s ruling, reiterated that this moment represents not just a boardroom dispute, but a test of corporate accountability and shareholder protection in global biopharma governance.

What Comes Next

The upcoming Special Meeting of Shareholders on July 9, 2025, is expected to be decisive. Shareholders of record as of May 19, 2025, will have the power to determine whether Sinovac continues on its current path of transparency, shareholder equity, and legal legitimacy—or reverts to a regime whose actions have been condemned in court and contested across years of litigation.

Sinovac’s Board is urging shareholders to vote AGAINST the Dissident Slate and FOR a future of fair governance, dividend access, and restored market trust.

This unfolding situation is more than a governance dispute—it is a corporate referendum on the very principles of shareholder equity, cross-border accountability, and post-pandemic leadership in global biopharma. Sinovac’s ability to honour its dividend commitments, re-enter public markets, and safeguard shareholder value now rests on a single shareholder vote.