Institutional investors claim hundreds of millions from Philips

This article was last updated on February 7, 2025

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Institutional investors claim hundreds of millions from Philips

A group of more than one hundred institutional investors wants compensation of more than 800 million euros from Philips. They are parties such as pension funds from, among others, the US and Germany, who state that the company has concealed the health risks of its sleep apnea for years.

As a result, investors would not have known what the real value of the shares they bought was. When the problems came out in 2021, the share price fell sharply and shareholders made major losses.

In a brief response, Philips contradicts that it is liable and states that the investors has always and well informed about the problems at Respironics, the subsidiary where the devices were made.

At the time, a large recall had to be set in motion, because foam could crumble from the sleep apnea into particles that may have been carcinogenic. According to the parties who now want compensation, Philips knew it for years, but it just continued with the production of the devices, which also made a lot of profit.

“In fact, too little information has been given, and it came too late,” says Dutch lawyer Frank Peters on behalf of the institutional investors. “Published research shows that since 2015 Philips knew how big the problems were. They are actually going back to 2008, 2009, when the first complaints were there. That was brought out in very small kibbles. It was kept small.”

Sleeping apnea

At Sleep apnea you often stop breathing while you sleep: 5 times an hour or more often. You don’t breathe for 10 seconds or longer. You can scare awake, or don’t notice anything and just sleep through.

Because you always stop breathing, you sleep less deeply and well. During the day you feel very sleepy and tired. You can become irritable and get concentration problems.

A sleep apnea ensures through a face mask that you get oxygen all night.

That more than 800 million euros is claimed is “the work of economists,” he says. “They can calculate pretty well what the stock price would have been if Philips had always been honest. Then you go back in time and then you grab the picture of the stock price. Up or below what the course would have been if the information was processed by the market.

Peters blames the company mainly silence. “Companies often have bad news, that can happen. And if they say that on time, it will not lead to claims, but if they keep it under the cap. Because then the shareholders could not involve that in their decisions.”

For that reason, he does not think that this is the normal risks that simply belong to investing in shares. “The risk you take is how well the company is doing, but then that company has to tell you honestly how things are going.”

This claim from Institutional Investors is independent of a case that was initiated in 2022 by the Association of Effects owners (VEB), which stands up for the interests of private shareholders. In that case the damage is estimated at 16 billion euros. Peters states that his clients have their own thoughts about how you can get the best compensation, “although he does not rule out the fact that the parties will work together later.