Investors demand new deep probe into Philips over sleep apnea device scandal

Investor lawyers are again calling for a deep investigation into Royal Philips, warning that a repeat of the company’s apnea-device crisis cannot be ruled out. They allege the Dutch medical technology company failed to disclose problems in time involving deteriorating foam in breathing devices that triggered a 2021 recall of millions of units.

The renewed pressure comes from shareholder representatives who argue Philips mismanaged warning signs for years. They say issues at the company’s U.S. ventilation subsidiary were already known by 2015, when the U.S. Food and Drug Administration warned that its complaint-handling system was not properly functioning. Investors argue the company should have acted much earlier at the leadership level.

The 2021 recall led to widespread device withdrawals, significant financial losses and a sharp decline in Philips’ share price.

Investor groups, including the Dutch Shareholders’ Association (VEB), now seek to hold Philips liable for damages. They say a formal, in-depth inquiry is necessary to assess responsibility and recover losses. Asset manager Vanguard, along with pension funds and insurers, has also joined the request for an investigation.

The VEB has asked the Dutch Enterprise Chamber to appoint an independent official at Philips to oversee potential settlement talks and address alleged conflicts of interest involving CEO Roy Jakobs, who previously led the division responsible for the apnea devices.

Philips rejects the allegations, saying shareholders are interpreting disclosures with hindsight. The company maintains there were no clear signals of elevated health risks before the recall and that complaint levels remained limited. It also argues that the recall does not prove a systemic failure in its internal systems.

Former CEO Frans van Houten said the recall had a major impact on patients, shareholders and other stakeholders. He added that Philips consistently communicated about the situation and acted responsibly throughout the process.