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Investigations Dataset

 

Investigation Name:    Investigation into Sinovac's Activities in China between 2002 and 2011

Trend:    None

Type of investigation:    Internal, SEC, DOJ

Agencies Investigating/Assisting with SEC/DOJ Investigation:   

Whistleblower:    Unknown

Summary

In a 6-K filed on December 23, 2016, Sinovac Biotech Ltd. disclosed that it had begun an internal investigation into allegations raised in a research report by Geoinvesting, a market research firm in the U.S. and China. The allegations in the report became the subject of five judgments the Beijing People’s Court issued in 2016 and 2017 related to corrupt conduct allegedly engaged in by a former official of the Center for Drug Evaluation in CFDA, his wife and his son. Specifically, the official and his wife had solicited and accepted payments from various individuals involved in the vaccine products industry. According to the judgments, one of the individuals solicited by the official was Weidong Yin, Sinovac Biotech’s chairman, president and chief executive officer. In all, Mr. Yin was alleged to have made three payments, and arranged for a loan, to the official and his wife, in the total amount of $77,000 between 2002 and 2011, but Mr. Yin was not charged with any offense or improper conduct and cooperated as a witness.

Based on this disclosure, the SEC notified the company of an inquiry into the allegations in February 2017 and subsequently issued a subpoena to the company in April 2017. The DOJ notified Sinovac Biotech in Spetember 2017 that it had initiated an inquiry into the allegations. The company said it is cooperating with both agencies.

In its 20-F filed on November 22, 2017, Sinovac Biotech detailed the allegations noted above and further disclosed that in June 2017, the company became aware of certain judgments based on bribery charges issued by Chinese courts against various officials of the Chinese Center for Disease Control (the "CDC"). The judgments referenced referenced eight of Sinovac Biotech's former and current salespersons, though no charges were brought against the company or any of its directors, officers or employees as defendants. Following discovery of these judgments, expanded its internal investigation to review the company's sales practices and policies.

On August 20, 2018, Sinovac Biotech announced that the SEC had concluded its investigation and would not be pursuing an enforcement action against the company.

On September 17, 2018, the company announced that the DOJ had closed its investigation and would not be pursuing an enforcement action against the company.

Company:    Sinovac Biotech Ltd.

Entity Type:    Public Company

Place of incorporation:    China

HQ Country(ies):    China

Ticker:    SVA

Market:    NASDAQ

Industry:    Healthcare


Name:    Weidong Yin

Employer:    Sinovac Biotech Ltd.

Title:    Chairman, President, and CEO

MISCONDUCT SNAPSHOT # 1

Period of Investigated Conduct:    Start: 2002     End: 2011

Amount of Investigated Payments:    $77,000

Total Revenue Generated from Investigated Payments:    Unknown

Total Profit Earned or Expenses Avoided from Investigated Payments:    Unknown

Officials Potentially Influenced:   

  • Official, Chinese Center for Drug Evaluation in CFDA
  • Officials, Chinese Center for Disease Control

Third-Party Intermediaries Involved in the Conduct:    Unknown

Types of Investigated Bribes:   

  • Money Cash, Wire or Check: No Available

Purpose of Investigated Payments:    Unknown

Date Commenced:    12/23/2016

Publicly Disclosed by Company in Advance of Resolution:    Yes  Information

Date First Publicly Disclosed by Company:    12/23/2016

Origin of the Internal Investigation:    Unknown

Conduct Investigated:   

  • Undetermined FCPA-Related Misconduct
  • Improper Payments

Evidence of Misconduct Found:    Unknown

Company Departments/Personnel Assisting with Investigation:   

  • Audit Committee

Third Parties Assisting with Investigation:   

  • Outside Counsel

Countries/Regions Investigated:   

  • China

Scope of Investigation Expanded:    Yes

Scope of Investigation Contracted:    Unknown

Investigating Agency (U.S.):    Securities and Exchange Commssion

Date Commenced:    02/01/2017

Publicly Disclosed by Company in Advance of Resolution:    Yes  Information

Date Investigation First Publicly Disclosed by Company:    05/16/2017

Origin of the Government Investigation:    Company Filing with SEC

Agreement to Toll Statute of Limitations:    Unknown

Length of Tolling Agreement:    Unknown

Conduct Investigated:    Undetermined FCPA-Related Misconduct

Countries/Regions Investigated:   

Scope of Investigation Expanded:    Unknown

Scope of Investigation Contracted:    Unknown

Notices:   

Type Date Requested or Received Date First Publicly Disclosed by Company Recipient Description
Notice 02 /2017 05/16/2017 Sinovac Biotech Ltd. After the Company publicly announced the internal investigation arising from the Geoinvesting article, the SEC staff notified the Company of an enforcement inquiry related to the matters discussed in the article.

Requests for Information:   

Type Date Requested or Received Date First Publicly Disclosed by Company Recipient Information Requested Description
Subpoena 04 /2017 05/16/2017 Sinovac Biotech Ltd. Documents The SEC staff subsequently issued a subpoena requesting documents related to the internal investigation.

Status of SEC Investigation   

Status:   Investigation Concluded and No Further Action Taken

Party to the Resolution:   Sinovac Biotech Ltd.

Date Investigation Closed:   Unknown

Date Closure First Publicly Disclosed:   08/20/2018

Reason Investigation Closed:   Unknown

Estimated Length of Investigation:   19 months

Investigating Agency (U.S.):    U.S. Department of Justice

Date Commenced:    09/01/2017

Publicly Disclosed by Company in Advance of Resolution:    Yes  Information

Date Investigation First Publicly Disclosed by Company:    11/22/2017

Origin of the Government Investigation:    Unknown

Agreement to Toll Statute of Limitations:    Unknown

Length of Tolling Agreement:    Unknown

Conduct Investigated:    Undetermined FCPA-Related Misconduct

Countries/Regions Investigated:   

  • China

Scope of Investigation Expanded:    Unknown

Scope of Investigation Contracted:    Unknown

Grand jury empaneled?    Unknown

Notices:    Unknown

Requests for Information:   

Type Date Requested or Received Date First Publicly Disclosed by Company Recipient Information Requested Description
Request 09 /2017 11/22/2017 Sinovac Biotech Ltd. Documents In September 2017, the Company received an inquiry from the DOJ and has been cooperating with the DOJ.

Status of DOJ Investigation   

Status:   Investigation Concluded and No Further Action Taken

Party to the Resolution:   Sinovac Biotech Ltd.

Date Investigation Closed:   Unknown

Date Closure First Publicly Disclosed:   09/17/2018

Reason Investigation Closed:   Unknown

Estimated Length of Investigation:   13 months

Transaction/Spin-off/Reorganization Negotiated or Completed During Misconduct or Investigation:    No

Mitigating Factors Disclosed by the Company Under Investigation:     Information

Self-Report Cooperation Voluntary Remedial Measures

FCPA-Related Investigation Costs  Information

Aggregate Incurred Costs:    Unknown

Aggregate Accruals:    Unknown

No Date Document Type Source Public Disclosure