Investors claim billions from Philips over damages from sleep apnea devices recall
Investors’ association VEB holds healthcare technology group Philips liable for the damage investors suffered in the recall of sleep apnea devices. According to VEB, Philips has misinformed patients and shareholders about the matter. The interest group estimates investors' damage due to the Philips share’s price losses at 16 billion euros.
Philips recalled about 5.5 million sleep apnea devices after finding that the insulating foam in the machines could crumble, potentially causing severe health damage to patients. The problems became known last year, but documents from the United States regulator FDA show indications of problems as early as 2015. French prosecutors have already launched a preliminary investigation into Philips over the matter. The judiciary in the US is also targeting Philips.
The VEB said that from the moment Philips first reported large-scale problems with ventilators in April 2021, the group’s stock market value decreased by over 27 billion euros. Of this, some 16 billion euros in damage could be directly traced to the lack of information about the apnea affair, according to the VEB. Philips’ failure to provide information has resulted in misleading financial statements, board reports, and press releases in recent years. “In addition, VEB has also conveyed serious objections to Philips on behalf of investors due to the lack of thorough internal control and administrative organization.”
The VEB first wants to talk to Philips. It may also ask the Enterprise Chamber to investigate the state of affairs at Philips since 2015. And the association is considering filing a collective claim against Philips.
Philips confirmed that it received a letter from the VEB but would not go into details. In concise terms, the company said it always acted with integrity and looked forward to any discussion with the investor association with confidence. “We will carefully study the letter's content before responding further,” said a Philips spokesperson.
The healthcare technology group recently announced that after nearly 12 years, CEO Frans van Houten would hand over the reins to Roy Jakobs, who also works at Philips, as of October 15. Jakobs is still ultimately responsible for the major recall of the company’s sleep apnea devices.
Reporting by ANP