Syncor’s Stock Further Battered
The stock of nuclear-medicine provider Syncor International Corp. melted down for a third day Friday as lawsuits seeking class-action status accused the company of misleading shareholders by concealing the payment of bribes overseas.
Woodland Hills-based Syncor said Wednesday that its founder, Monty Fu, and his brother Moses Fu, who ran the company’s foreign operations, have been put on leave while a board committee investigates payments to customers in China, Taiwan and other countries. It said the payments may have violated U.S. and foreign laws, including the Foreign Corrupt Practices Act, which bans bribes.
Syncor shares fell $4.31 Friday, or 19%, to $18.37 on Nasdaq, closing the week down 50%.
Syncor agreed in June to a takeover by drug wholesaler Cardinal Health Inc. in a deal valued at $1.1 billion. The deal is on hold while both firms investigate Syncor’s business practices.
“I think people are concerned about the outcome of the merger,” A.G. Edwards & Sons analyst Andrew Speller told Reuters on Friday.
Cardinal Chief Executive Robert Walker said Wednesday that Syncor’s pharmacies, which dispense radioactive drugs that help doctors treat illnesses, are a good fit for Cardinal, but he said top priority was to protect its reputation. Cardinal wouldn’t comment further Friday.
The law firms Levy & Levy in Stamford, Conn., Abbey Gardy in New York and Brian M. Felgoise in Philadelphia said Friday that they had filed claims in U.S. District Court in Los Angeles seeking damages on behalf of shareholders. In a statement, the Levy firm said Syncor’s news releases and financial filings were materially misleading because they failed to disclose that Monty and Moses Fu “were making illegal payments to Syncor’s overseas customers.”
Syncor spokesman Allen Mayer declined comment on the stock price and lawsuits. He said Syncor is sharing details of its internal investigation with the Justice Department and the Securities and Exchange Commission.
Syncor hopes to wrap up its investigation by Dec. 6, when its shareholders are to vote on Cardinal’s buyout, Mayer said.
