British investigation adds to GSK’s bribery woes

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br Pfizer deal Reuters GlaxoSmithKline now faces a signage in London. The SFO action comes two weeks after Chinese police charged the former British boss of GSK's China business with corruption. Photo: Reuters

London - Britain has launched a formal criminal investigation into GlaxoSmithKline (GSK), posing a new challenge to the drug maker, which already faces claims of bribery in China and four other countries.

The Serious Fraud Office (SFO) said on Tuesday that its director had “opened a criminal investigation into the commercial practices of GSK and its subsidiaries”, confirming an earlier statement from the company.

Shares in Britain’s biggest drug maker dropped 1.5 percent in early trade yesterday.

“GSK is committed to operating its business to the highest ethical standards and will continue to co-operate fully with the SFO,” the company said.

Neither the fraud office nor the company gave any further details about the case, and a company spokesman declined to elaborate.

In an apparent plea for more information from company insiders, the SFO added that whistle-blowers were a valuable source of information and it welcomed approaches “from anyone with inside information on all our cases, including this one”.

The UK action comes less than two weeks after Chinese police announced on May 14 that they had charged the former British boss of GSK’s China business and other colleagues with corruption, after an investigation there found evidence of an elaborate scheme to bribe the country’s doctors and hospitals.

The case is the biggest corruption scandal to hit a foreign company in China since the Rio Tinto affair in 2009, which resulted in four executives, including an Australian, being jailed.

Lawyers and analysts said allegations against GSK in overseas markets could expose the company to charges under the UK’s 2010 Bribery Act.

The new act prohibits payments to government officials, including state-employed doctors, to win business overseas. However, GSK can claim mitigation against prosecution if it can show that it had robust checks in place that were circumvented by rogue employees.

Authorities in China first accused GSK in July last year of funnelling up to 3 billion yuan (R5bn) in bribes to encourage doctors to use its medicines in a case that the company described as “shameful”.

Allegations have surfaced elsewhere and GSK is investigating claims that bribes were paid to doctors in Poland, Iraq, Jordan and Lebanon. – Reuters


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