Dietary supplement maker Herbalife in a regulatory filing this week provided an update on an ongoing investigation regarding the company’s compliance with the Foreign Corrupt Practices Act in China.
Herbalife first revealed the investigation in January 2017. The investigation is “mainly focused on the company’s China external affairs expenditures relating to its China business activities and the adequacy of, and compliance with, the company’s internal controls relating to such expenditures,” Herbalife said in a Feb. 19 Form 10-K filing.
“This investigation is proceeding, with the government continuing to request documents and other information relating to these matters,” Herbalife said.
Herbalife said it is also conducting its own review and “has taken remedial and improvement measures based upon this review, including but not limited to replacement of a number of employees and enhancements of company policies and procedures in China.” Additionally, the company continues to cooperate and engage in discussions with the Securities and Exchange Commission and Department of Justice.
“Although a likely outcome could include a resolution or government action,” Herbalife said, it “cannot predict the eventual scope, duration, or outcome of the government investigation at this time, including potential monetary payments, injunctions, or other relief, the results of which may be materially adverse to the company, its financial condition, its results of operations, and its operations.” Nor can it “reasonably estimate the amount of loss relating to this matter.”