By Angela Chen
Mead Johnson Nutrition Co. has agreed to pay $12 million to
settle charges that employees at its Chinese subsidiary paid people
at government-owned hospitals to recommend the company's infant
formula.
This was a violation of the Foreign Corrupt Practices Act,
according to the Securities and Exchange Commission. Mead Johnson
neither admitted or denied the findings, but will pay $7.77 million
in disgorgement, $1.26 million in prejudgment interest and a $3
million penalty.
From 2008 to 2013, employees at the subsidiary allegedly paid
more than $2 million in cash and other incentives to health-care
professionals in Chinese hospitals to recommend Mead Johnson
products and to release contact information for expectant mothers
who could be directly marketed to, according to the SEC.
A representative for the company said it is pleased to "have
reached this final resolution."
This month, the Illinois-based nutrition company said revenue
slid 7% in the second quarter as the strong U.S. dollar affected
sales overseas and the company stumbled in China.
Shares recently rose 0.6% and have declined more than 10% so far
this year.
Write to Angela Chen at angela.chen@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires