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A Chinese Government tax fraud investigation led to imports from hearing implant maker Cochlear being blocked for about three months late last year.
While Cochlear was not implicated in the investigation, the Australian company and its competitors were unable to ship new stock into the Chinese market.
Cochlear has made no statement to the stockmarket concerning any problems with the Chinese market.
Citigroup Smith Barney analyst Andrew Goodsall, who unearthed details of the investigation, said: "We understand that in October 2004, the Chinese Government launched an investigation into a state-endorsed research centre for deaf children for tax fraud.
"Whilst two of Cochlear's four distributors remain under investigation, Cochlear is not implicated, and from mid-January 2004 it was able to recommence sales into China," Mr Goodsall said.
Cochlear chief executive Chris Roberts said yesterday the claims were "not hugely off the mark".
He would not comment on whether any sales had been lost in the period ahead of February's quarterly trading update.
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"There's always ups and downs," Dr Roberts said.
"There's nothing in there that's not manageable. The world hasn't fallen apart."
Dr Roberts said the matter "was not something that we felt was necessary to put a statement to the market about", adding he would comment further at the upcoming earnings briefing.
Any lost Chinese sales may have been partially offset by growth in US sales in the December quarter after Cochlear's major US competitor, Advanced Bionics, suffered a global recall due to faulty devices.
"We suspect that the effect of competitor Advanced Bionics' global recall largely offset the impact of a stalled Chinese market," Mr Goodsall said.
He said Cochlear appears to have maintained gains in US market share.
Mr Goodsall cut his forecast for the number of Cochlear unit sales to the Chinese market in the first half of the 2005 financial year by 50 units, but added them to the second half because Cochlear's competitors were also off the market for the duration of the Chinese investigation.
Source: www.theage.com
While Cochlear was not implicated in the investigation, the Australian company and its competitors were unable to ship new stock into the Chinese market.
Cochlear has made no statement to the stockmarket concerning any problems with the Chinese market.
Citigroup Smith Barney analyst Andrew Goodsall, who unearthed details of the investigation, said: "We understand that in October 2004, the Chinese Government launched an investigation into a state-endorsed research centre for deaf children for tax fraud.
"Whilst two of Cochlear's four distributors remain under investigation, Cochlear is not implicated, and from mid-January 2004 it was able to recommence sales into China," Mr Goodsall said.
Cochlear chief executive Chris Roberts said yesterday the claims were "not hugely off the mark".
He would not comment on whether any sales had been lost in the period ahead of February's quarterly trading update.
AdvertisementAdvertisement
"There's always ups and downs," Dr Roberts said.
"There's nothing in there that's not manageable. The world hasn't fallen apart."
Dr Roberts said the matter "was not something that we felt was necessary to put a statement to the market about", adding he would comment further at the upcoming earnings briefing.
Any lost Chinese sales may have been partially offset by growth in US sales in the December quarter after Cochlear's major US competitor, Advanced Bionics, suffered a global recall due to faulty devices.
"We suspect that the effect of competitor Advanced Bionics' global recall largely offset the impact of a stalled Chinese market," Mr Goodsall said.
He said Cochlear appears to have maintained gains in US market share.
Mr Goodsall cut his forecast for the number of Cochlear unit sales to the Chinese market in the first half of the 2005 financial year by 50 units, but added them to the second half because Cochlear's competitors were also off the market for the duration of the Chinese investigation.
Source: www.theage.com