refer to the section titled “General Information on our Group — Share Capital” of this Prospectus for further details on the “A” Preference Share. As CBB is also engaged in the Competing Business, this may give rise to potential conflicts of interests should they decide to expand their operations into similar regions as us.
Despite the abovementioned, the “A” Preference Share which was issued to CBB to enable them to acquire all our issued Shares would lapse on the day of our listing on the Main Board of the SGX-ST. As such, CBB will accordingly cease being a Controlling Shareholder upon our listing on the Main Board of the SGX-ST and the aforementioned conflict of interests situation will cease to exist.
Mitigation
We believe that any potential conflicts of interests are addressed as follows:
Our Directors have a duty to disclose their interests in respect of any contract, arrangement or any other proposal whatsoever in which they have any personal material interest, directly or indirectly, or any actual or potential conflicts of interests (including conflicts of interests that arise from their directorship(s) or executive position(s) or personal investments in any other corporation(s)) that may involve them. Upon such disclosure, such Directors shall not participate in any proceedings of our Board of Directors, and shall in any event abstain from voting in respect of any such contract, arrangement, proposal, transaction or matter in which the conflict of interest arises, unless and until our Audit Committee has determined that no such conflict of interest exists. Hence, Ms Jin Lu will abstain from participating in relation to any matters that may give rise to potential conflicts of interests with China Cord Blood. In addition, Ms Jin Lu will also abstain from participating in relation to any matters or transactions which may involve the CBB Group.
(a) China Cord Blood and CBB are companies listed on the New York Stock Exchange and the Australian Securities Exchange, respectively. The board of directors of each of China Cord Blood and CBB is separate and distinct from our Board of Directors. In this regard, all decisions undertaken by each of China Cord Blood and CBB will be (i) respectively subject to the relevant listing rules in respect of the New York Stock Exchange and Australian Securities Exchange; (ii) subject to the scrutiny of the relevant regulators and authorities and (iii) where applicable, subject to the respective approvals of the shareholders of China Cord Blood and CBB, and will accordingly be made independent of our Company.
(b) Notwithstanding the fact that Ms Jin Lu is an executive director of Golden Meditech Holdings Limited which indirectly owns 41.0% of China Cord Blood as at the Latest Practicable Date, any influence that China Cord Blood may have on our board decisions is limited in view of the fact that the board of directors of China Cord Blood is separate and distinct from our Board of Directors and the fact that none of our Directors (save for Ms Jin Lu) are in any way related to China Cord Blood. Moreover, despite being our indirect Shareholder, the role played by China Cord Blood in relation to the affairs of our Group has historically been limited and they have remained a passive investor since their investment in CBB, our previous parent company, through a private placement exercise in 2007.
(c) There exists geographical segmentation in respect of the markets in which each of China Cord Blood, CBB and our Group currently operates. Whereas our Group operates primarily in Singapore and Hong Kong, CBB focuses on developing markets, operating in the Philippines, Indonesia and India and China Cord Blood operates primarily in Beijing as well as Guangdong province and Zhejiang province.
In addition, we have entered into a marketing collaboration agreement with China Cord Blood, pursuant to which China Cord Blood agrees to utilise and authorise its sales resources and sales team to assist Cordlife Hong Kong in the promotion of Cordlife Hong Kong’s Cord Blood Banking Services in the PRC and in particular, undertake marketing activities to promote the Cord Blood Banking Services offered by Cordlife Hong Kong to expectant mothers who intend to deliver in Hong Kong.
In respect of CBB, we have entered into the Non-Compete Agreement, pursuant to which our Company agreed not to undertake any activities or carry on of any business or trade that competes directly with the business carried on or proposed to be carried on by CBB in Indonesia and the Philippines for a period of three years from 30 June 2011 and in India for a period of five years from 30 June 2011. The period of non-competition in these jurisdictions is determined by the board of CBB based on their assessment of the businesses and the estimated time-frame that is required for such businesses to turn profitable and, if the board of CBB decides to dispose of such businesses, our Company would have the first right to acquire these businesses under the ROFR Agreement. In the Non-Compete Agreement, CBB also agreed not to undertake any activities or carry on any business or trade that competes directly with the business carried on or proposed to be carried on by our Company in Singapore and Hong Kong for a period of three years from 30 June 2011. The Non-Compete Agreement was entered into on a voluntary basis between our Company and CBB.
In addition, in view of the fact that CBB will cease being a Controlling Shareholder upon our listing on the Main Board of the SGX-ST due to the lapsing of the “A” Preference Share, our Directors are of the view that the tenure of the Non-Compete Agreement is sufficient.
The Non-Compete Agreement is conditional upon, among others, the following: (a) there being no change of control in CBB, (b) no corporate action, legal proceedings or other procedure or step is taken in relation to CBB as to the suspensions of payments, a moratorium of its indebtedness, winding up, among others, and (c) the ROFR Agreement, the Co-operation Agreement and the Trademark Agreement not having been terminated pursuant to their terms. We also entered into the Co-operation Agreement, pursuant to which both CBB and our Company agree to market and sell the cord blood banking services, on behalf of the other party, to potential customers who intend to store the cord blood units in a jurisdiction(s) in which the other party operates in. In view of the aforementioned, the regions in which each of China Cord Blood, CBB and our Group currently operates in have been specifically delineated.
(d) Our Audit Committee is required to examine the internal guidelines and procedures put in place by our Company to determine if such guidelines and procedures put in place are sufficient to ensure that interested person transactions and potential conflict are conducted on normal commercial terms and will not be prejudicial to our Group and our minority shareholders
(e) Upon our listing on the SGX-ST, we will be subject to Chapter 9 of the Listing Manual in relation to interested person transactions. The objective of these rules is to ensure that our interested person transactions do not prejudice the interests of our shareholders as a whole. These rules require us to make prompt announcements, disclosures in our annual report and/or seek shareholders’ approval for certain material interested person transactions. Our Audit Committee may also have to appoint independent financial advisers to review such interested person transactions and opine on whether such transactions are fair and reasonable to us, not prejudicial to our interests and the interests of our minority shareholders.
(f) Our Directors owe fiduciary duties to us, including the duty to act in good faith and in our best interests. Our Directors are also subject to a duty of confidentiality that precludes a Director from disclosing to any third party information that is confidential to us.
Save as disclosed above and in the section titled “Interested Person Transactions” of this Prospectus, none of our Directors, Controlling Shareholders and key executives or their respective Associates has any material interest, direct or indirect, in:
(a) any company carrying on the same business or deals in similar products as our Company or any of our Subsidiaries;
(b) any enterprise or company that is our Group’s customer or supplier of goods or services; and/or
(c) any material transactions to which we were or are to be a party.
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1. The name, age, address, principal occupation and business and working experience of each of our Directors and Executive Officers are set out in the section titled “Directors, Executive Officers and Staff” of this Prospectus.
2. Save as disclosed below, none of our Directors or Executive Officers has:
(a) at any time during the last 10 years, had an application or a petition under any bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within two years from the date he ceased to be a partner;
(b) at any time during the last 10 years, had an application or a petition under any law of any jurisdiction, filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within two years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency;
(c) any unsatisfied judgment against him;
(d) ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or have been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose; (e) ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law
or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or have been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach;
(f) at any time during the last 10 years, had judgment entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part;
(g) ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust;
(h) ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust;
(i) ever been the subject of any order, judgment or ruling of any court, tribunal or governmental body permanently or temporarily enjoining him from engaging in any type of business practice or activity;
(j) ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of —
(i) any corporation which has been investigated for a breach of any law or regulatory