GSK now faces UK investigation
The woes of GlaxoSmithKline look set to continue as the UK’s Serious Fraud Office (SFO) has launched a criminal probe into the way the company does business.
This will be a shock for GSK whose reputation is already on shaky ground, which relates to an ongoing controversy in China where the company is accused of using a £320 million fund to offer cash, prostitutes and gifts to doctors.
The company is now under the microscope in several countries, including Iraq.
In a terse statement GSK says it had been informed that the SFO “has opened a formal criminal investigation into the Group’s commercial practices”. GSK adds they are “committed to operating its business to the highest ethical standards and will continue to cooperate fully with the SFO”.
The SFO is an independent government department, overseen by the attorney general, which investigates and prosecutes those who commit “serious or complex fraud, bribery and corruption”.
Although there is no word on a specific incident that the SFO is investigating, the news could hardly be more unwelcome for GSK, which has long protested that the allegations against it in various countries were atypical.
GSK itself has described such activity as ‘shameful’ and chief executive Sir Andrew Witty has already seen his bonus for last year cut substantially, as a result of the reputational damage done to the company.
Earlier this month a British man who headed GSK’s troubled China business was charged with two other executives on charges of bribery and corruption.
The SFO has encouraged people to come forward. “Whistleblowers are valuable sources of information to the SFO in its cases,” it said. “We welcome approaches from anyone with inside information on all our cases, including this one.”
Last month Poland became the latest country in the string of bribery claims to hit GSK as it faces legal action for allegedly paying doctors in the country to prescribe its drugs. Eleven doctors and a GSK regional manager have been charged over alleged corruption between 2010 and 2012.
A former sales rep said doctors were paid to promote GSK’s biggest selling medicine, the asthma drug Seretide (salmeterol xinafoate/fluticasone propionate), in the country.
If these allegations are proved GSK may have violated both the UK Bribery Act and the US Foreign Corrupt Practices Act, as it is illegal for companies based in either country to bribe government employees abroad.
In the UK this could mean GSK being fined up to 10% of its business earnings for 2013.
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