Cordlife needs a fresh start amid its ongoing scandal, not ‘old blood’ in a new bottle

SINGAPORE’S longest-running cord blood bank, Cordlife Group , has finally appointed a new group chief executive officer (CEO), amid the drawn-out saga over the mishandling of cord-blood units.

But the appointment is unlikely to be what its investors and customers were looking for.

The company on Feb 19 announced the appointment of 34-year-old Yiu Pang Fai as group CEO, replacing outgoing chief Tan Poh Lan.

Tan, 61, had served in the position for five years, before announcing her resignation last October – just months before Cordlife’s issues were made public.

Cordlife is currently serving a six-month suspension imposed by the Ministry of Health (MOH) in December 2023. Under the suspension, the cord blood bank cannot collect, test, process and store new cord blood and human tissues.

The suspension comes after MOH found that seven of Cordlife’s 22 cord blood storage tanks had been exposed to temperatures above the acceptable limits of minus 150 deg C, and that these “temperature excursions” had happened at different times, some dating back to November 2020.

In particular, one tank containing 2,200 cord blood units belonging to around 2,150 clients had been exposed to temperatures higher than acceptable over several days in February, March and June 2022.

Although the board had known of the lapse since February 2023, the matter did not come to light until November that year when MOH announced it was investigating Cordlife following a complaint from a member of the public.

The board said it had not announced the incident as it deemed that there would be “no material impact” on the company’s financial performance for FY2022 and FY2023.

Following the investigations, the authorities said earlier this year that it would review the regulatory requirements for cord blood banking providers, including the frequency of inspections as well as monitoring and reporting requisites.

At a time when Cordlife needs fresh – and strong – leadership to reset its image in the wake of its biggest crisis, the appointment of Yiu is a puzzling one.

Familial connections

Notably, Yiu’s parents and brother have links to Cordlife.

His parents are major shareholders of Cordlife. They have deemed interest in the shares of Cordlife held by TransGlobal Real Estate Group, which is a controlling shareholder of the healthcare group.

Meanwhile, Yiu’s brother, Yiu Ming Yiu, has been a non-independent, non-executive director of Cordlife since December 2021.

In addition, unlike his predecessor, Yiu has no background in the healthcare industry. His experience is mostly in the real estate, infrastructure and energy sectors.

Prior to his appointment as Cordlife’s group CEO, Yiu was an executive director of TransGlobal Group’s family office division in Hong Kong. TransGlobal specialises in real estate development and operation, and infrastructure construction in China and Hong Kong.

He also held executive positions at Popular Holdings, which is a publishing and retail company, as well as infrastructure companies such as Sichuan Chengmian Expressway and Hebei Shitai Expressway.

Prior to joining TransGlobal Group, Yiu served as an investment manager at Macquarie Infrastructure and Real Assets in Singapore.

Enough to restore confidence?

In a bourse filing, Cordlife’s board said that Yiu had the “requisite experience and capability” to be group CEO. It added that it had taken into consideration the recommendation of the nominating committee and assessed Yiu’s qualification and experience.

Its minority shareholders and existing customers are less likely to agree.

Considering the crisis that Cordlife has just emerged from, it is puzzling that the cord blood bank has chosen someone with no healthcare expertise, and also seemingly within its own networks.

The company saw its share price drop as much as 42.9 per cent in early trading a day after MOH issued its six-month suspension, falling close to its lowest level since its listing in 2012.

At a time when it could use fresh leadership to inspire confidence among both shareholders and customers, the appointment of someone within the close circle of the board of directors and major shareholders may not be the best move.

While it is arguable that CEOs do not need sector-specific knowledge to lead a company, it would have been preferred given the unique regulatory requirements of the industry and the social implications that it serves.

Cord blood banks in Singapore are inspected every two years to assess their compliance with regulatory requirements, and unannounced visits may be conducted if there are suspected lapses.

With these regulations set to tighten, Cordlife needs a CEO who can not only ensure the company can keep on top of more stringent rules, but manage the demands of affected customers as well as restore the reputation of the company.

The appointment of a strong, independent CEO with expertise in the healthcare sector might have given Cordlife a shot at quickly turning the ship around.

But as it stands, it appears the company is continuing to steer towards deeper waters.