Activist investment platform Tulipshare has accused healthcare giant Johnson & Johnson (J&J) of stifling debate and “silencing investors” after the firm pushed back on calls to withdraw a potentially dangerous baby powder from the market.
London-founded Tulipshare filed a proposal for the US consumer giant to withdraw the product from global sale after the talc-based baby powder was shown to contain traces of asbestos in 2020. Tulipshare bosses intended to present the proposal to shareholders at J&J’s annual general meeting.
But J&J has now called on the US watchdog the Securities and Exchange Commission (SEC) to ban the presentation on the grounds that it falls “under ordinary business operations” which do not need to be aired at an AGM.
In a letter to Tulipshare and the SEC, bosses at J&J also claimed that “implicates Johnson & Johnson’s litigation strategy in pending lawsuits to which J&J is a party involving talc-based Baby Powder”.
Tulipshare has hit back at the claims and says that J&J is using the litigation “as an excuse to avoid shareholder debate” and to “silence investors on a major health issue”.
“Tulipshare firmly believes that shareholders have a right to deliberate and vote on the global sale of Johnson & Johnson’s talc-based product, given that discontinuing it represents a sound public and company policy response to ongoing scrutiny and litigation,” the firm said.
The investor said that it was using the litigation defence to shield it from future lawsuits.
Since June 2021, J&J has had to pay $2.1 billion in damages for its failings over the product, after the US supreme court refused to hear the company’s objection to a 2018 verdict that their talc-based baby powder caused ovarian cancer in more than 20 women.
Antoine Argouges, Chief Executive and Founder of Tulipshare, said: “We hope Johnson & Johnson steps up and allows investors to have a say on this issue, given research shows that there are lives at risk.
“We’re here to proactively engage with Johnson & Johnson on this issue and trust Johnson & Johnson will do the right thing.”