Financial News

  • 29 May 2014, 8:51

GSK Probed By SFO In UK Over Bribe Claims

Britain's Serious Fraud Office (SFO) is investigating drugs giant GlaxoSmithKline (GSK) over alleged bribery, it has been confirmed.

The west London-based pharmaceutical firm, the world's sixth largest, said the SFO has opened a "formal criminal investigation".

It comes after Chinese authorities claimed GSK staff had bribed government and health officials in the country.

A company spokesperson said: "GSK is committed to operating its business to the highest ethical standards and will continue to co-operate fully with the SFO."

Shares in GSK were down more than 1.5% in mid-morning London trades.

The firm has been bruised by successive allegations about its business practices in a number of territories.

Although the most damaging investigation into its behaviour has been in China, its conduct in Iraq and Poland has also been probed by local law enforcement officials.

Chinese investigators claimed the former head of GSK's China unit, Mark Reilly, ordered his salespeople to bribe doctors and hospital officials to use the drug company's products.

Officials said it netted the firm more than 100m in "illegal revenue".

Less than two weeks ago Chinese officials said they had charged the former British boss of GSK's China business and other colleagues with corruption.

If allegations are proven, the company risks being fined under the UK Bribery Act or the US Foreign Corrupt Practices Act (FCPA).

From 2008 onwards, fines under the FCPA have been ratcheted up in value, some to nine digits.

The FCPA is designed to prevent corrupt payments to government officials, while UK anti-bribery legislation can be used in cases involving both government and non-government recipients.

The SFO investigation was launched after an inside informant made allegations against GSK.

The unit has also encouraged more people to come forward with claims of bribery against GSK, or any other firm.

A spokeswoman said: "Whistleblowers are valuable sources of information to the SFO in its cases.

"We welcome approaches from anyone with inside information on all our cases including this one - we can be contacted through our secure and confidential reporting channel, which can be accessed via the SFO website."

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