Report: SEC looking into charges of bribery in China

2019 06 04 18 56 7888 Chinese Flag 400

The U.S. Securities and Exchange Commission (SEC) is looking into charges that some of the largest multinational OEMs of medical imaging equipment allegedly paid bribes to government officials in China to secure equipment sales, according to an article published June 4 in Reuters.

The SEC investigation includes GE, Siemens, and Philips, and is part of a broader attempt by the U.S. government to crack down on alleged fraud in equipment procurement around the world, according to the story. Another SEC investigation is also active in Brazil, the story stated.

The story notes that under the Foreign Corrupt Practices Act (FCPA), it's illegal for Americans, U.S. companies, or firms whose stock is listed on a U.S. exchange to provide payments to foreign government officials to secure contracts. But the article charges that major imaging device vendors did just that and even accused vendors of colluding with each other "to fix prices and rig tenders for expensive medical equipment, such as MRI machines and CT scanners, through Chinese middlemen."

The article stated that Chinese hospitals paid prices that were at least 40% over what middlemen paid to vendors, and the difference was then allegedly "distributed as bribes to health officials." Other vendors then allegedly put in "cover" bids for equipment contracts to make public tenders look competitive, the Reuters article charged.

Imaging OEMs contacted by mostly declined to comment on the allegations in the Reuters story other than to point to corporate policies designed to discourage corruption.

"To date, the SEC has not informed the company that it is being investigated in China in connection with alleged FCPA violations," a Siemens spokesperson wrote in an email. "It is Siemens policy to cooperate with law enforcement investigations when they occur."

A Philips representative also wrote that the company was not aware of any SEC investigation prior to publication of the Reuters story. The company already has in place a "strict prohibition" against paying or receiving bribes and has a global due diligence process in place to manage risks attached to the use of business partners related to the sale of medical products.

"Philips is committed to full compliance with all applicable laws, rules, and regulations, and we have a zero tolerance policy towards noncompliance in relation to this," a Philips spokesperson wrote in an email to "Philips has a constructive relationship with various U.S. authorities, including the SEC, and we are in regular dialogue with them. We are not aware of any SEC investigation in connection with our medical device activities in China."

Similar comments were echoed by GE.

"We are committed to integrity, compliance, and the rule of law in every country in which we do business," a GE spokesperson wrote in an email.

Page 1 of 3593
Next Page