The U.S. Securities & Exchange Commission is reportedly investigating three of the world’s largest medical device makers for their alleged participation in a bribery scheme in China.
The SEC probe involves Siemens (NYSE:SI), Royal Philips (NYSE:PHG) and GE Healthcare (NYSE:GE), which allegedly used local middlemen to bribe Chinese government and hospital officials to buy their medical equipment, Reuters reported, citing a pair of American sources “with knowledge of the matter.”
Federal investigators are already looking into similar charges in Brazil involving those three firms and Johnson & Johnson (NYSE:JNJ). The alleged infractions would violate the Foreign Corrupt Practices Act, which makes it illegal for American citizens and companies to pay foreign officials to win business.
In both China and Brazil, the companies allegedly benefited from the initial sales and from larger profit margins from 10- to 15-year service contracts, software updates, spare parts and materials, according to the sources, “who spoke on condition of anonymity because they were not authorized to discuss the investigation publicly,” the wire service reported.
The SEC declined to comment. Siemens, GE and Philips all denied wrongdoing and said they were unaware of any SEC investigation concerning their Chinese operations; that country’s National Health & Family Planning Commission and the China Food & Drug Administration did not immediately respond to requests for comment, according to Reuters.
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