SEC Investigate Siemens, GE, Philips On China Medical Equipment Sale: Reports

(RTTNews) - The U.S. Securities and Exchange Commission is reportedly investigating whether Siemens AG, Philips NV and General Electric Co paid bribes to sell medical equipment in China.

According to Reuters, SEC is investigating whether the medical equipment makers used middlemen to negotiate bribes with Chinese government and hospital officials to sell their products.

The SEC is also probing into the companies sales in Brazil, as part of the regulator's effort to crack down on alleged corruption in sales of costly medical equipment worldwide.

Meanwhile, Siemens, GE and Philips have all denied those allegations and claim they are not aware of any SEC investigation concerning their operations in China.

Based on the Foreign Corrupt Practices Act of 1977 (FCPA), it is illegal on part of US companies or foreign companies listed in the country to bribe foreign officials to improve business. Companies face huge fines from the SEC if found guilty.

China's medical device market was $58.63 billion in 2017, compared to $10.8 billion for Brazil, the report says.

The companies benefited not only from the sale of the equipment but also from the profit made from servicing the equipment as well as selling software updates, spare parts and the materials used in operating the machines.