A court in Amsterdam on Saturday denied demands by shareholders of Philips for an investigation into the company over its handling of a massive product recall involving its sleep apnea and ventilator machines in 2021. The Enterprise Chamber of the Amsterdam Court of Appeal ruled in favor of the company, dealing a setback to a large group of Philips shareholders, including the Dutch investors' association, VEB, and several institutional investors. The shareholders called for a court inquiry after the Dutch medtech launched a recall of roughly 3.5M breathing machines in 2021 due to concerns that a polyurethane foam used in the devices could deteriorate and become toxic. The investors argued that the company failed to identify and address the issues promptly due to weaknesses in its internal systems, and alleged that the Philips board of directors was aware of the problems at the company's Respironics U.S. unit, which made the devices, well before the disclosures were made regarding the issue. The chamber said there is no reason to assume that Philips ought to have intervened at Respironics earlier, or that the Supervisory Board exercised insufficient oversight, and added that there is no sufficient basis to determine that Philips' disclosures to the investors were late, incorrect, or misleading. The chamber didn't rule on whether there were errors at Respironics or regarding the extent of liability for damages faced by investors.
Koninklijke Philips NVAmsterdam court denied shareholders' probe request into Philips' 2021 sleep apnea/ventilator recall, ruling no basis that Philips intervened late or misled investors.
