Philips Paid $62 Million to Settle SEC Charges Over China Tender Misconduct

Summary

In May 2023, the U.S. Securities and Exchange Commission announced that Koninklijke Philips N.V. agreed to pay more than $62 million to resolve Foreign Corrupt Practices Act-related charges concerning its medical-equipment business in China. The SEC found that between 2014 and 2019, Philips China employees, distributors and sub-dealers engaged in improper conduct intended to influence government hospital officials and increase the likelihood that Philips products would win public tenders. This included influencing tender specifications to favor Philips products and preparing additional bids involving competitors' products to create the appearance of legitimate competitive tenders. The SEC also identified distributor discounts that created risks that excessive margins could fund improper payments to government employees. Philips agreed to approximately $41.1 million in disgorgement, $6.0 million in prejudgment interest and a $15 million civil penalty. Philips settled without admitting or denying the SEC's findings and said it had cooperated, investigated the matter and taken remedial measures. Sources: SEC — Philips to Pay More Than $62 Million to Settle FCPA Charges Philips statement on SEC settlement