Summary

• Recently disclosed court documents show that Sinovac Biotech’s (NASDAQ: SVA) CEO bribed a member of the Chinese Food and Drug Administration to assist its vaccine clinical trial and approval
• Bribery is a clear violation of Foreign Corrupt Practices Act (FCPA) regulations and is prohibited for SEC registered companies like SVA; it could lead to criminal prosecution and fines
• We believe that non-disclosure of these actions taken by SVA’s CEO is a clear violation of both SEC and NASDAQ regulations
• We believe this revelation jeopardizes the company’s two outstanding non-binding go private offers and could also impact future CFDA approvals and the company’s cash flow
• We believe U.S. regulators and Chinese FDA officials will investigate these allegations, as well as potential implications for all of SVA’s past and future vaccines

Sinovac Biotech’s CEO Bribed a Chinese Food and Drug Administration Official

According to an article from Chinese media source The Paper, in late April 2015, Yin Hongzhang, Deputy Director General of the Center for Drug Evaluation under the CFDA, was apprehended by government authorities as part of an investigation. In June of 2015, Yin Hongzhang was subsequently removed from his position at the CFDA per an announcement made by the CFDA. The details of his removal had not become available in China until just recently. It is these details, combined with the research we have performed over the last few days, that lead us to believe that investors will start to question whether SVA’s buyout offers are in jeopardy.

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