Qualcomm Inc. will be hoping to bury another piece of unfortunate history between the company and Chinese authorities, paying out a $7.5 million USD fine in response to allegations that they bribed Chinese officials with gifts and offers of employment, they said in a release on Tuesday.
According to a statement released by the US Securities and Exchange Commission (SEC), Qualcomm violated anti-bribery provisions by hiring relatives of Chinese officials in charge of the country’s telecommunications markets.
The SEC says that Qualcomm also “provided gifts, travel, and entertainment to try to influence officials at government-owned telecom companies in China.” The reports shows that Qualcomm referred internally to relatives of Chinese officials as “must place” or “special” hires for full time jobs and internships, describing the positions as “quite important from a customer relationship perspective.”
“For more than a decade, Qualcomm went to extraordinary lengths to gain a business advantage with foreign officials deciding between Qualcomm’s technology and its competitors,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.
Among other listed offenses, Qualcomm also provided a $75,000 USD research grant on behalf on an official’s son, and a company executive provided a $70,000 USD loan to the son of a Chinese official to purchase a home.
Qualcomm has agreed to pay the $7.5 million USD civil penalty to close the matter, as well as committing to tighten internal controls, including monitoring the network of political and familial relationships of new staff.
“Qualcomm is pleased to have put this matter behind us. We remain committed to ethical conduct and compliance with all laws and regulations, and will continue to be vigilant about FCPA compliance,” said Don Rosenberg, Executive Vice President and General Counsel of Qualcomm. The company’s statement also says the alleged offenses all occurred prior to 2012.
It’s not the first time Qualcomm has come under fire as as they strive to maintain dominance in the geopolitically fierce battlefield of Chinese telecommunication contracts. In early 2015, the San Diego-based company paid out a $975 million USD fine following a year-long investigation by Chinese antitrust authorities, who claim the company violated the country’s antimonopoly laws.
The case shed doubt over Qualcomm’s ability to settle contracts with China’s largest handset vendors, causing their stock to stumble 38 percent percent in 2015. The company, which makes approximately 60 percent of their revenue from licensing fees, recently settled on licensing fees with Lenovo in February, following a deal with Xiaomi in December.