Qualcomm has already reached an agreement with the U.S. Securities and Exchange Commission to pay $7.5 million as it violated the U.S. anti-bribery laws. This action took place after the accusations that Qualcomm improperly hired the relatives of Chinese officials as it asked to do more business in the country, which is considered as its biggest market.
According to Reuters, SEC unveiled that the Chinese officials that were involved with Qualcomm's new hires were making a decision whether they should choose the company's mobile technology products in the middle of the growing competition in the telecommunications market globally. The manner of choosing the Chinese officials relatives allegedly happened between 2002 and 2012. This included offering jobs to some people who did not even make it to the hiring standards at the San Diego-based telecommunications company.
It claimed that the company disclosed the SEC probe. Qualcomm has also taken some methods to improve its existing internal controls and procedures.
The Financial Times reported that the company's revenues depend on China. During the last few years, the company's business in the country faced its downfall. The telecommunications company stated that Chinese clients were not paying the exact amount on their royalty agreements in 2014 and 2015, which affected its revenues.
The manner of hiring interns who were related to Chinese officials is not new among western companies. They even seek to navigate China's challenging regulatory environment. However, the SEC's set of investigations has been focused on firms that practice such method of hiring interns, including JPMorgan.
It was also disclosed that SEC probe also found out that the San Diego-based telecommunications company also provided gifts, travel, and entertainment to try to persuade Chinese officials at the government-owned companies in the country, as reported by CHANNEL NEWSASIA. Since Qualcomm misrepresented in its books and records that these things given to the Chinese officials are of value, as the company has insufficient internal controls to detect improper payments.
Meanwhile, a Qualcomm spokesperson could not immediately give comments regarding the issue. But the company did not admit nor deny the SEC's findings regarding its improper hiring in China.
