Blood Storer’s Former Owner Fails to Shake Investors’ Fraud Suit

The former parent company of Hong Kong-based Global Cord Blood Corp. must battle allegations the health-care conglomerate participated in a scheme to defraud investors through the former subsidiary’s failed sham buyout of a Texas-based biotech firm.

Investors sufficiently pleaded Golden Meditech Holdings Ltd. participated in a scheme to defraud shareholders when it, through another subsidiary, “knowingly entered into a sham transaction under which it was to receive $664 million in cash consideration” while the deal was intended to hide past monetary transfers from Global Cord, Judge P. Kevin Castel said Tuesday.

And the Global Cord investors “adequately allege that Meditech ...