By Gianluca Lo Nostro
(Reuters) -Investor group European Investors-VEB on Wednesday applied for a court inquiry into Philips over allegations of misleading disclosures and management failures linked to the company’s recall of sleep apnea devices.
Philips recalled around 15 million sleep apnea devices in 2021 after discovering that the foam in the machines could release harmful substances, posing health risks.
VEB has applied to the Enterprise Chamber of the Amsterdam Court of Appeal, claiming that Philips’ failing information provision has resulted in misleading annual reports, press releases and other public disclosures.
“Investor confidence has been seriously damaged. There is a great importance for all concerned that offences do not stay shrouded in the mist, lessons are learnt, and responsibility is taken,” VEB said in a statement.
When asked by Reuters to comment on VEB’s court initiative, Philips said that the group’s request may also be denied.
“The Enterprise Chamber must first assess whether the request is justified… We do not agree with the positions that VEB takes in the press release, and Philips will defend itself,” a Philips spokesperson said in an emailed statement to Reuters.
The sleep apnea devices recall led to probes in multiple countries, including France, where prosecutors are still investigating charges of aggravated fraud and failure to report safety risks.
The Dutch technology company paid $1.1 billion to settle litigation in the U.S. but authorities there have prohibited it from selling the devices.
If granted, the request may lead to an independent investigation but it will not result in fines or compensations requests against Philips.
(Reporting by Gianluca Lo Nostro; Editing by Matt Scuffham)
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