Philips has reached a settlement of USD 62 million (58 million euros) with the US Securities and Exchange Commission (SEC) for alleged corruption in China. According to the stock market watchdog, the medical technology company unfairly influenced hospital employees to sell its equipment between 2014 and 2019. The SEC has that on Thursday announced.
According to the SEC, Philips subsidiaries in China offered special discounts to distributors, knowing they could use some of that extra profit to bribe government officials. Employees, distributors or salespeople of Philips subsidiaries in China also allegedly improperly influenced hospital employees to draw up technical specifications in tenders that favored the products of the Dutch company.
For example, the SEC concluded that a Philips regional sales manager in China had paid money to a hospital director in exchange for his assistance with the purchasing process. “In another case, Philips China employees spoke with hospital executives about aligning technical specifications for a public tender so that only Philips China and two other manufacturers would be eligible for the bid,” the SEC said.
Additional bids
Finally, Philips employees, distributors or salespeople allegedly influenced bids improperly by preparing additional bids for products from other manufacturers to create the appearance of legitimate public tenders where the minimum number of bids was reached under Chinese rules.
Philips neither admits nor denies guilt in the settlement. Of the amount that the company pays, $ 15 million is a fine, $ 41 million concerns profits that Philips would have made as a result of the illegal actions. The remaining $6 million is interest.
According to the regulator, Philips violated the American Foreign Corrupt Practices Act (FCPA). All companies with a stock exchange listing in the US are subject to the US anti-corruption law, the ANP writes. Shares of the Dutch company are also traded on the New York Stock Exchange. In 2013, the SEC sued Philips for similar conduct in Poland between 1999 and 2007.