Qualcomm And Its Chinese Shenanigans

The chip maker has been penalized millions of dollars by U.S. Securities and Exchange Commission

According to the announcement made by Qualcomm Inc. on Wednesday, the San Diego, Calif. based semiconductor company has finally cleared its dues with the U.S. Securities and Exchange Commission (SEC). The $81 billion company was penalized by SEC on account of violating the Foreign Corrupt Practices Act (FCPA). The company came under the non-compliance of the FCPA when it allegedly appointed Chinese government officials’ relatives and further bribed them with gifts, entertainment, and travel expenses. In a statement given by SEC, the chip maker is due to pay $7.5 million in order to settle the allegations placed on it.  

The regulatory authority, SEC, carried out an investigation against the Californian organization and deduced that the leading semiconductor company has hired influential government officials’ relatives in order to have undue influence on the selection of the “company’s mobile technology products amid increasing competition in the international telecommunications market,” as read out in the statement given by SEC. As cited in the official statement of SEC, the internal term for such hiring was “must place” or “special” hires in order to grown and retain its business in China. Moreover the financials of the chipmaker were not presented fairly and were misrepresented. In addition to it, Qualcomm provided fabricated data to the regulatory authorities.

The multinational semiconductor manufacturer has also been accused of forwarding $75,000 to U.S. university in form of the research grant so that the child of one of Chinese official can retain his position in the Ph.D. program while simultaneously get the extension in his student visa. In addition to it, the accusation of giving house loan worth $70,000 to the official’s son has also been put on the chipmaker.

Qualcomm, hence, “violated the anti-bribery, internal controls and books-and-records provisions of the Securities Exchange Act of 1934 without admitting or denying the findings,” stated as per SEC results. The chipmaker, however, neither decline nor accept the pile of accusations put on it. Its Executive Vice President, Don Rosenberg expressed that the company is pleased for having put the matter behind. Mr. Rosenberg strongly persisted that company will remain committed to ethical conduct and will firmly meet the compliance of laws and regulations.

It is however noteworthy that Qualcomm has previously come under the burden of litigations quite few terms in relation to its operations in China. For the company, this Asian region holds substantial importance for the company in light of which the chip maker has carried out gigantic technological developments in the region which collaterally opened humungous growth opportunities for the California based telecomm products manufacturer. Qualcomm envisions growing strong partnership in the region and having steady growth. Along such efforts, the company got carried out which resulted negatively for the chipmaker. Currently, the U.S. based chipmaker has 4.9% share in the China’s market which is projected to reach at 6% in the near future subject to the condition that the organization’s licensing business matures strongly.