Mead Johnson 'can't predict how or when' SEC China infant formula probe will end

30-Jan-2015 - Last updated on 30-Jan-2015 at 14:08 GMT

Mead Johnson Nutrition cannot foresee "how or when" the US Securities and Exchange Commission (SEC) will conclude its investigation into the promotional practices of its Chinese infant formula business.

Illinois-based Mead Johnson Nutrition - the world's second largest infant formula company (Euromonitor) - announced in October 2013 that SEC was probing "certain expenditures" made by its Chinese business in connection with the promotion of infant formula.

It simultaneously launched its own investigation to assess whether the actions of its Chinese business violated internal policy or US law.

In a conference call with analysts yesterday - scheduled to coincide with the release of the company's full-year results - Kasper Jakobsen, CEO, Mead Johnson Nutrition, gave a "brief note" on the status of the SEC probe.

"Our internal investigation has progressed and we've shared the results of our work to date with both the SEC and the Department of Justice and we are responding to their request for additional information," he said.

"At this time, we can't predict how or when the matter will be resolved. I'm sure you will appreciate that I can't provide further details at this point."

When pressed, he added: "...it's a priority for us to try and bring it to resolution as soon as we can."

If determined by SEC to have violated the US Foreign Corrupt Practices Act (FCPA) or other laws, Mead Johnson Nutrition could face financial penalties and civil and criminal sanctions.

SEC investigations are conducted privately. Subsequently, it does not discuss the details of any ongoing investigation.

In August 2013, just weeks before SEC launched its probe, Mead Johnson Nutrition was slapped with a RMB203.7m (US$33m) fine by the Chinese National Development and Reform Commission (NRDC).

It handed down fines to Mead Johnson Nutrition, Abbott Laboratories, Fonterra, FrieslandCampina, Danone Dumex, and Biostime, following an investigation into price-fixing and anti-monopoly law violations by infant formula manufacturers in China.