BEIJING — A federal judge in Massachusetts has denied a petition from Vivo Capital related to shareholder votes and corporate governance at SINOVAC Biotech Ltd., marking the fourth unsuccessful legal challenge brought by investors seeking to disrupt the company’s current board leadership.
The June 30 ruling by the U.S. District Court for the District of Massachusetts rejected Vivo Capital’s request for relief against 1Globe Capital LLC, SINOVAC’s largest shareholder. In its decision, the court stated, “relief relating to governance outcomes or shareholder votes – are DENIED without prejudice.”
SINOVAC, a China-based biopharmaceutical company listed on NASDAQ, said the ruling removes another obstacle to distributing a previously declared US$55.00 per common share special cash dividend.
The failed petition is the latest in a series of legal actions by Vivo Capital and Advantech/Prime Success — referred to by the company as the “Dissenting Investor Group” — to challenge the current board chaired by Chiang Li, M.D.
The company characterized these legal efforts as part of a broader strategy to prevent the board from carrying out its duties. “The Dissenting Investor Group’s self-serving, multi-pronged lawfare strategy is crystal clear: (1) block actions taken by the SINOVAC Board to distribute rightful dividend payments to valid SINOVAC common shareholders; (2) protect the ill-gotten gains it stripped from SINOVAC subsidiaries over the past seven years; and (3) regain control of SINOVAC in order to continue to loot the Company,” the board said in a statement.
The conflict has played out across multiple jurisdictions, with recent failed legal actions in New York and Hong Kong. In January 2025, the UK Privy Council issued a final, unappealable ruling recognizing the legitimacy of the current board and deeming the company’s prior leadership an “Imposter Board.” That decision found “nothing unlawful in the conduct of 1Globe” in connection with the company’s 2018 annual general meeting.
The company also accused the former board of pursuing self-enriching transactions, including a 2016 attempt to privatize SINOVAC at a below-market price, a 2018 PIPE deal that diluted shareholders, and investments of over $100 million in funds managed by Vivo Capital. Additionally, the board pointed to a 2020 deal in which Vivo Capital acquired a 15% stake in Sinovac Life Sciences Co., Ltd. for $15 million, a transaction SINOVAC claims was unnecessary and disproportionately beneficial to the Dissenting Investor Group.
Meanwhile, SINOVAC shareholders have received no dividends and have been unable to trade their shares for six years. In contrast, the board says the Dissenting Investor Group has received more than $1 billion in distributions from the company’s subsidiaries.
Despite legal and public challenges, the current board is continuing efforts to implement its dividend policy and governance reforms. New reports from independent proxy advisory firms Glass Lewis and ISS recently recommended that shareholders vote to retain the existing board.
“The current SINOVAC Board remains committed to its mission of restoring fairness, delivering value, and protecting the rights of all valid shareholders,” the company said.
