Mead Johnson discloses China payments probe

Infant-formula maker Mead Johnson Nutrition Company disclosed a new FCPA investigation in its latest SEC filing.

It said the SEC had asked for documents about its China unit and “certain expenditures” for product promotions that may have violated the FCPA.

The Illinois-based company was part of Bristol-Myers Squibb until it was spun off in 2009.

Mead Johnson’s flagship product is Enfamil. 

The company paid $33 million in penalties in 2013 for price fixing and collusion after an investigation by China’s National Development and Reform Commission. Other companies fined in the case were Biostime, Dumex, Abbot, Friesland and Fonterra.

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Here is Mead Johnson’s FCPA disclosure from its Form 10-K filed with the SEC on February 18:

Following an SEC request for documents relating to certain business activities of the Company’s local subsidiary in China, the Company is continuing an internal investigation of such business activities. The Company’s investigation is focused on certain expenditures that were made in connection with the promotion of the Company’s products or may have otherwise been made. Certain of such expenditures were made in violation of Company policies and may have been made in violation of applicable U.S. and/or local laws, including the U.S. Foreign Corrupt Practices Act (the “FCPA”). The investigation is being conducted by outside legal counsel and overseen by a committee of independent members of the Company’s board of directors. The status and results of the investigation are being discussed with the SEC and other governmental authorities. At this time, the Company is unable to predict the scope, timing or outcome of this ongoing matter or any regulatory or legal actions that may be commenced related to this matter. If a violation of the FCPA or other laws is determined to have occurred, the Company could become subject to monetary penalties as well as civil and criminal sanctions.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.