Sinovac's COVID success masks a decade-long power struggle

Sinovac Biotech, a Chinese vaccine maker, has become a global household name due to its COVID-19 vaccine, CoronaVac. However, the company's success has been marred by a decade-long power struggle between its founders and institutional backers. A failed attempt to take the company private in 2016 sparked the conflict, which escalated with a special shareholder meeting on July 8.

Sinovac Biotech Ltd., a Chinese vaccine manufacturer, has become a global household name due to its COVID-19 vaccine, CoronaVac. However, the company's success has been marred by a decade-long power struggle between its founders and institutional backers. A failed attempt to take the company private in 2016 sparked the conflict, which escalated with a special shareholder meeting on July 8.

The ongoing battle stems from a failed attempt in 2016 to take the company private, which divided the original founders and their institutional supporters into hostile camps. The situation escalated during a special shareholder meeting (SM) on July 8, 2025, called by dissident shareholders led by SAIF Partners, Sinovac’s largest single shareholder with a 15% stake. SAIF Partners, backed by Vivo Capital and Prime Success (each holding about an 8% stake), sought to replace the board, alleging poor corporate governance, the board’s reluctance to resume dividend payments, and its failure to relist Sinovac shares, which have been suspended since February 2019 [1].

The SM quickly dissolved into chaos and was adjourned by Chairman Chiang Li, citing unresolved litigation about the legitimacy of certain shareholdings, specifically those issued to Vivo Capital and Prime Success through a 2018 PIPE (private investment in public equity) transaction. This contested share issuance is crucial as it could affect voting rights and control of the company [1].

The roots of the feud go back to 2016, when Sinovac’s attempt to delist from Nasdaq led Yin Weidong (then chairman and CEO) and Pan Aihua (chairman of the main subsidiary, Sinovac Beijing) to form rival buyout groups. Yin was supported by SAIF Partners, while Pan gained Chiang Li’s backing. The conflict involved multiple lawsuits and even physical confrontations at Sinovac’s Beijing factories in 2018. Legal disputes have traversed courts in the U.S., U.K., and Antigua and Barbuda and included the activation of a “poison pill” defense mechanism that ultimately failed after being struck down by a Delaware court [1].

Legal dynamics shifted again in early 2024 when Pan was jailed for embezzlement. In January 2025, the U.K. Privy Council ruled that Pan's group had lawfully gained control in the 2018 board election, declaring the previous board and the poison pill invalid. A new board led by Chiang Li was installed, yet SAIF Partners soon called for another shareholder vote to oust Li’s board, leading to the current impasse [1].

At the heart of the dispute is Sinovac’s pandemic windfall. By January 2022, the company had distributed over 2.7 billion CoronaVac doses worldwide, with 2021 net income reaching nearly $14.5 billion—78 times that of the previous year. Its available cash soared from $1.1 billion in 2020 to $11.6 billion in 2021. Despite these profits, shareholders have yet to see substantial dividends due to the ongoing legal uncertainty. Recently, the new board announced a series of special dividends totaling up to $138.73 per share (potentially $10 billion overall), but payouts to some disputed shares would be withheld until the court resolves their status [1].

In summary, Sinovac’s boardroom battle, fueled by unresolved legal and ownership questions, continues to overshadow one of the pandemic’s biggest commercial success stories, leaving its massive cash reserves in limbo and its investors awaiting resolution [1].

References:
[1] https://www.caixinglobal.com/2025-07-23/in-depth-sinovacs-covid-fortune-fuels-bitter-boardroom-battle-102344297.html