US launches probe into Qualcomm

The US Justice department has launched an anti-corruption investigation into the activities of Qualcomm, the world’s biggest chipmaker for mobile phones.

The company said on Wednesday it learned last week that the US attorney’s office in San Diego, California – the city where Qualcomm is based – had begun a preliminary inquiry regarding its compliance with the Foreign Corrupt Practices Act (FCPA).

The 1977 act made it unlawful to bribe foreign government officials to assist in obtaining business.

“We believe we are in compliance with the requirements of the FCPA,” said Paul Jacobs, chief executive, on an earnings call with analysts. “We will continue to cooperate with this investigation and look forward to resolving this matter.”

In a regulatory filing reporting its fiscal first quarter earnings, Qualcomm said the Securities and Exchange Commission was also investigating the matter. In addition, it noted the SEC had begun a formal investigation of the company in 2010 over a “whistleblower’s allegations”.

Qualcomm’s audit committee carried out its own inquiry into the allegations and related accounting practices and did not identify any errors in its financial statements, it said.

Thanks to growth in demand for smartphones using its chips, Qualcomm on Wednesday reported $4.68bn in quarterly sales, up 40 per cent on a year earlier and ahead of analyst expectations of $4.58bn. It raised its revenue guidance for its fiscal year from $18bn-$19bn to $18.7bn-$19.7bn.

The company’s shares rose 5 per cent in extended trading in New York to $62.54, a level not reached since 2000.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.