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The SEC probe covered period from 2008 to 2013 |
Mead Johnson is to pay over US$12m in a settlement of an investigation from the US Securities and Exchange Commission into the infant formula group's promotions in China.
The probe was first disclosed by Mead Johnson in October 2013 when, following a request for information from the SEC, the Enfamil maker said it was conducting its own probe into "certain expenditures that were made in connection with the promotion of the company's products or may have otherwise been made".
Mead Johnson said at the time some of the expenditures "were made in violation of company policies" and may have broken US and/or local laws, including the US Foreign Corrupt Practices Act.
The SEC investigation covered 2008 to 2013. Mead Johnson said today (28 July) the terms of the settlement means it "neither admits nor denies the allegations in the settlement and order" but it has agreed to disgorgement, as well as the payment of pre-judgment interest and a penalty. It will pay $12.03m.
Mead Johnson said it had taken "a number of positive steps to bolster its compliance programme, function and processes".
Kasper Jakobsen, Mead Johnson's CEO, added: "Integrity and compliance with laws and regulations are central to the success of our operations around the world. We will continue to reinforce these operating principles in all our interactions with customers and business partners."
In 2013, Mead Johnson was hit with a separate $33m fine imposed by China's anti-trust regulator, the NDRC, as part of the watchdog's review of the marketing and pricing practices of international formula manufacturers in the country. The fine was part of a wider investigation into competition in the infant formula category and Mead Johnson was one of a handful of companies found to violate local competition regulations. In total, the NDRC handed out fines totalling $108m, the biggest anti-trust ticket in China's history.
