Philips continues to face legal challenges following the massive 2021 recall of its sleep apnea devices. US investors, who began a claim several years ago, submitted a request in December to include Philips CEO Roy Jakobs in the case. These details were disclosed in the company’s annual report published on Thursday and were also reported by the NRC.
The healthcare technology group has been managing a major recall of millions of sleep apnea machines for three years. The recall was triggered by concerns that insulating foam inside the devices could degrade and break off. This issue has led to high legal costs. In 2024, Philips reached a $1.1 billion settlement to compensate patients.
Despite this settlement, investors are still seeking compensation for losses caused by a sharp decline in the company’s share price. A court in New York has allowed the US investors to amend their original indictment. In response, Philips has filed a motion to dismiss the claim.
The case in America was first filed in 2021. At that time, Roy Jakobs was a senior director, not the CEO. However, he was in charge of the specific division responsible for the sleep apnea devices. Investors had previously focused their legal efforts on the former CEO, Frans van Houten.
In the Netherlands, shareholders are also taking action. Six different claim organisations have approached Philips, holding the company and its directors liable for allegedly making false statements. They also claim that Philips failed to share information about the recall in a timely manner.
The Dutch Association of Securities Owners (VEB) has asked the Enterprise Chamber (ondernemingskamer) in Amsterdam to launch an in-depth investigation. Several other parties, including the large US asset manager Vanguard, submitted similar requests last month.
In its annual report, Philips noted that it may still incur costs for these legal procedures, but considers this unlikely. The company has not set aside any funds for potential costs, stating that it cannot yet reliably estimate any future financial impact.
@anp | NEWS BRAINPORT
