SINGAPORE – A process overhaul has taken place at Cordlife under the leadership of its new boss Ivan Yiu, who vows to rebuild trust at the troubled private cord blood bank.

New laboratory hires have also been added to boost the firm’s technical strength.

Mr Yiu spoke to The Straits Times on May 7, the first time the group chief executive officer broke his silence since taking over the reins of the company on Feb 19.

Processes at the company have been in the spotlight after it was revealed on Nov 30, 2023, that cryopreserved cord blood units in seven of its 22 storage tanks were exposed to sub-optimal storage temperatures. Cord blood units have to be stored at temperatures of no higher than minus 150 deg C.

About 7,500 cord blood units in two tanks and in a dry shipper – a container used to transport cord blood units at extremely low temperatures – have been deemed non-viable and unlikely to be suitable for stem cell transplants.

The company is now facing pressure on multiple fronts – including investigations by the police and health authorities, legal actions from aggrieved customers, and internal shareholder disputes.

When asked why he believed that Cordlife can still continue to operate and win over new clients after losing customers’ trust, Mr Yiu said: “While this has been one of the company’s biggest challenges, we have gained insight into how we can strengthen and improve our processes. The new Cordlife has even tighter measures to ensure cord blood units are safely stored.”

In a statement on May 7, the company said it has recruited two additional lab directors with PhDs and implemented a retention programme to foster stability among its lab personnel with high potential in Singapore.

A spokesman added that the company is also reaching out to former staff from its processing and storage facilities in other markets to support its lab operations in Singapore.

Among the key system upgrades is a more advanced lab monitoring system, which has a web-based dashboard. The system will send multiple alerts via e-mails, SMSes and phone calls on potential issues, whereas the old system could send only SMS alerts.

The company is currently under a six-month suspension that began on Dec 15. During this period, it has to stop collecting, testing and processing any new cord blood and human tissues, or providing any new types of tests to patients.

It remains to be seen if the Ministry of Health (MOH) will continue the suspension or allow it to be lifted. But Mr Yiu assured customers that the company is doubling down on corrective actions to allow it to return to business.

One of the key corrective actions is to build a stronger sense of responsibility among its staff.

“If there are lapses, it shouldn’t be just one or two people who bear the blame,” he said. “It’s every employee’s responsibility to look out for each other.”

It has engaged a US-based expert consultant from international accreditation body Foundation for the Accreditation of Cellular Therapy (Fact) to guide the Singapore team towards this end.

Fact, widely recognised as one of the leading authorities on cord blood banking processes, has been guiding the technical team since December 2023 on operational matters. Fact will be on-site in mid-May to review the organisational structure and chain of command in the lab, said Mr Yiu.

Mr Yiu also addressed questions on the company’s whistle-blowing policy. 

The investigations by MOH in 2023 that unearthed the mishandling of cord blood units were triggered by feedback from a member of the public. 

When asked if he knew whether the feedback was given by an insider or outsider, Mr Yiu said the company does not know and does not want to make assumptions.

He added that the management and the board of directors had not received any whistle-blowing reports in relation to lab processes previously. 

“I think it’s important that people remind each other what’s the right thing to do, and not wait till the extent that you have to whistle-blow,” he said.

He also addressed questions on the decision of Cordlife’s board of directors to make a police report against mostly former employees on April 17. In a previous bourse filing, the company said it uncovered preliminary evidence of potential wrongdoing by them. 

Mr Yiu said: “The board wanted to make sure that all bases were covered and the necessary steps were being taken.”

When asked if there was reason to believe there was sabotage by former employees, he said he could not comment as it is a police matter now. 

Cordlife also gave an update on refunds it offered in February to about 1,800 affected clients with cord blood units in Tank A.

Without sharing exact figures, it said a “significant number” of affected clients had accepted the offers.

Cordlife previously estimated that the refund and waiver of annual fees for all affected active clients would lead to a fall in revenue and profit before tax of about $9.2 million for the financial year ending Dec 31, 2024.

When asked if the company is confident about remaining financially viable to continue to operate and the source of its funds, Mr Yiu said the financial year ending Dec 31, 2024, will be for rebuilding Cordlife’s foundation and with a focus on not just growth, but also long-term sustainability.

The company cannot comment beyond that as it is due to release its first-quarter financial results by May, he said.

Cordlife is also facing the possibility of legal challenges on multiple fronts, including its first letter of demand from an unnamed client, proceedings in the Small Claims Tribunals, and potential class-action type lawsuits brewing. 

Addressing feedback that customers have been frustrated at and confused by Cordlife’s communications, Mr Yiu said that going forward, it hopes to bring a more personal touch to its interactions with clients. 

The company is considering a potential town hall with parents, and more opportunities for face-to-face meetings with customers. 

“Being able to interact with them and show them some of our changes – that’ll be important. At the same time, we want to understand their biggest worries and concerns and mitigate that,” said Mr Yiu. 

One of the company’s next key milestones is an annual general meeting on May 14. Resolutions to oust several board members and appoint new ones will be tabled, as two controlling shareholders go head-to-head in a potential boardroom shake-up. 

“It’s not about who’s the shareholder, who’s the director. But it’s more about the lapses that have happened. We need to fix these issues and there are so many affected customers out there. We have made certain promises to them, including the partial refund,” said Mr Yiu. 

“Certain things we say we would do as a company, we need to make good to these parents. We already failed them once, we don’t want to fail them another time.”