Mead Johnson begins China bribery probe on US watchdog SEC's request
Mead Johnson Nutrition, the American infant food maker that gets almost a third of its sales from the mainland, is investigating whether bribes may have been paid by its mainland unit.
The internal probe is looking at whether the unit paid bribes in violation of mainland and United States law to promote the sale of its products, the company said on Thursday.
The voluntary investigation was started at the request of the US Securities and Exchange Commission and was being handled by an outside law firm.
"We have committed to doing a thorough job of supplying them with whatever they want," chief executive Peter Jakobsen said. "We don't have a timeline here."
US and European drug makers and health-care companies have been under investigation by the mainland authorities since at least June, when British pharmaceuticals company GlaxoSmithKline announced a probe.
Mead Johnson, which makes the Enfamil formula products, and French group Danone were among six dairy companies that were fined 670 million yuan (HK$854 million) in August for fixing prices on the mainland.
"At this time, the company is unable to predict the scope, timing or outcome of this ongoing matter or any regulatory or legal actions that may be commenced related to this matter," Mead Johnson said in a statement.
Mead Johnson reported third-quarter earnings, excluding certain items, of 91 US cents a share on Thursday, beating the average of 80 US cents of 14 analysts' estimates.
The company raised its full-year profit forecast to US$3.30 to US$3.37 a share from US$3.22 to US$3.30.
Glaxo faces allegations it traded in sexual favours and had spurious travel and meeting expenses amounting to 3 billion yuan. Eli Lilly said in August it was investigating allegations that its employees paid bribes and kickbacks to mainland doctors. Another French firm, Sanofi, faces an investigation over similar allegations.
Danone also faces a probe after mainland authorities this month accused the company of paying bribes to doctors to boost business for its infant formula.