Qualcomm pays $7.5m to settle China bribery allegations

US chipmaker Qualcomm has agreed to pay $7.5m (£5.4m) to settle allegations it violated bribery laws by hiring younger relatives of Chinese officials.

 

According to the US Securities and Exchange Commission (SEC), Qualcomm went to "extraordinary lengths to gain a business advantage".

The probe found the firm also provided gifts, travel and entertainment to try and influence officials.

Qualcomm did not admit or deny the allegations, between 2002 and 2012.

The chipmaker also said it had since improved its internal checks and controls.

"Qualcomm is pleased to have put this matter behind us. We remain committed to ethical conduct and compliance with all laws and regulations," said Don Rosenberg, Executive Vice President and General Counsel of Qualcomm.

The case is part of a push by the SEC against the hiring of relatives of senior Chinese political and state-business figures.

Previous SEC investigations into the hiring of so called "princelings" included the banks JPMorgan and HSBC.

Jobs and research grants

The SEC investigation into Qualcomm disclosed cases where young relatives of managers at Chinese state-owned telecommunications companies had been given internships or hired as staff.

The managers were subsequently credited for helping Qualcomm's business development, the SEC said.

In one case, Qualcomm gave $75,000 for a research grant to a US university on behalf of the son of an executive at a state-owned company so he could complete his PhD, according to the SEC.

The son was later hired as an intern and eventually became a permanent employee despite having been described as a "no hire" and someone "who would be a drain on teams he would join".

Later a Qualcomm executive personally provided the official's son with a $70,000 loan to buy a home, the SEC said.

"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.

Qualcomm makes chips used in smartphones and tablets, especially the Snapdragon processor found in many mid- and high-end Android devices.

But it has faced increasing competition from Asian manufacturers like Taiwan's MediaTek or smaller Chinese chipmakers.