Polygon requests convening of EGM of Biotest AG
LONDON, June 11, 2020 /PRNewswire/ -- Polygon Global Partners LLP acts as investment manager to funds and accounts that hold a total of 858,743 ordinary shares and 1,728,351 preferred shares in Biotest AG, representing approximately 6.54% of the share capital in the company.
Yesterday, funds and accounts managed by Polygon filed a request with the management board of Biotest to convene an extraordinary general meeting of shareholders. Polygon's EGM request proposes three agenda items for shareholders' consideration: (1) the dismissal of newly elected supervisory board member Mr. Xiaoying (David) Gao, (2) election of a suitable replacement to the supervisory board that is free of conflicts of interest and (3) the launch of a special audit to investigate events in connection with the proposal for election of Mr. Gao.
Polygon's request comes after the management board of Biotest refused to allow the vote on a counter-motion filed by Polygon at the annual general meeting of Biotest held as a virtual meeting on 8 May 2020. In that counter-motion, Polygon had requested a special audit into the circumstances surrounding the proposal for election of Mr. Gao (see PR newswire of 6 May 2020).
Polygon's concerns with respect to Mr. Gao arise from the fact that he currently serves as the CEO and Vice Chairman of the board of directors of a major competitor of Biotest—UK blood plasma company, Bio Products Laboratory Ltd. (BPL). BPL is also a group company of Chinese investment firm, Creat Group, who is the majority but non-dominating shareholder of Biotest.
Polygon maintains its view that Biotest should not have allowed the CEO and director of a competitor be elected to its supervisory board without disclosing the reasons for deviating from the requirements of the German Corporate Governance Code1. The management board and supervisory board of Biotest have rejected these concerns on the basis that BPL is, in contrast to Biotest, mainly active in the US market, which merely creates a "potential competition" between the two companies that neither needs to be disclosed nor explained (see Polygon PR newswire of 6 May 2020).
In its EGM request, Polygon sets out in detail that Biotest, even according to own statements, has plans to enter the US market in the near-term and has already made significant investment in establishing a US presence. Therefore, in Polygon's view, there is actual competition between Biotest and BPL and a clear conflict of interest and breach of law created by Mr. Gao's position on the supervisory board of Biotest.
Polygon believes that it is in the interests of all Biotest shareholders that the events surrounding Mr. Gao's election be investigated and remedied via Polygon's proposed EGM resolutions.
1 Sec. 5.4.2/C12 of the German Corporate Governance Code (Deutscher Corporate Governance Kodex) provides that the members of a company's supervisory board should not be members of governing bodies of or exercise advisory functions at major competitors of the company and should not have a personal relationship with a major competitor.
Contact: Polygon Investor relations ([email protected])
SOURCE Polygon Global Partners LLP
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