A group of over 100 institutional investors have written to Dutch medical technology company Philips demanding compensation of €800 million for “significant losses to shareholders” over the sleep apnea scandal.

The claimants say Philips withheld information about critical health risks associated with its sleep and respiratory care devices used to treat sleep apnea, despite knowing about the health problems 10 years ago.

“Despite this knowledge, Philips failed to disclose these risks to the public, regulators, or investors,” the companies said in a statement. “Instead, the company continued to manufacture, market, and sell these devices, generating substantial profits.”

It was not until April 2021 that Philips finally disclosed the health issues in its quarterly results and started to recall the faulty devices.

The group claim the consequences for Philips shareholders have been substantial. The company’s share price dropped  “multiple times” following various recalls and disclosures about regulatory investigations.

In total, the company’s market capitalisation plummeted by nearly € 28 billion over this time span and caused significant losses to its shareholders, including the group of shareholders currently launching a demand against the company.

“Philips must now hold itself accountable to shareholders that are seeking remedy for its failure to disclose information, a key component to a transparent and efficient financial market,” said Joseph Gulino, managing partner with legal firm DRRT, which is working on the case together with Amsterdam lawyers Rubicon Impact & Litigation.

Long legal process

The letter is the first stage in what is likely to be a long legal process.

Several other cases have already been started by shareholder groups against Philips for misinformation. According to the Financieele Dagblad, the sleep apnea scandal has cost the company some €5.2 billion so far.

In April 2024, Philips has reached a $1.1 billion out-of-court settlement in the US to pay patients who said they had been made ill by using the equipment or that they may face health problems in future.

Philips denies any wrongdoing and says it has always briefed shareholders in time.