GSK under UK fraud office scanner after foreign bribery claims

May 29 2014, 21:00 IST
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SummaryBritain’s fraud office has launched a formal criminal investigation into GlaxoSmithKline , posing a new challenge to the drugmaker, which already faces claims of bribery in China and four other countries.

Britain’s fraud office has launched a formal criminal investigation into GlaxoSmithKline , posing a new challenge to the drugmaker, which already faces claims of bribery in China and four other countries.

The Serious Fraud Office (SFO) said late on Tuesday that its director had “opened a criminal investigation into the commercial practices of GlaxoSmithKline and its subsidiaries”, confirming an earlier brief statement from the company. Shares in the company — Britain’s biggest drugmaker and the sixth-largest pharmaceuticals group in the world by sales — fell 1.5% in early Wednesday trading on the news.

“GSK is committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO,” the company said. Neither the SFO nor GSK gave any further details about the case, and a company spokesman declined to elaborate. In an apparent plea for more information from GSK insiders, the SFO added that whistleblowers were a valuable source of information and it welcomed approaches “from anyone with inside information on all our cases including this one”.

The SFO 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 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.

The decision by the British fraud office does not come as a complete surprise, since lawyers and industry analysts had pointed out that allegations against GSK in overseas markets could expose it to charges under the 2010 UK Bribery Act. The new act, like the long-established US Foreign Corrupt Practices Act (FCPA), prohibits payments to government officials, including state-employed doctors, to obtain business overseas.

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