GlaxoSmithKline investigating bribery allegations in Iraq

 

GlaxoSmithKline is facing fresh bribery allegations as it continues to battle a multi-million-pound corruption probe in China.

The latest scandal involves claims that Brentford-headquartered GSK hired Iraqi government doctors and pharmacists, paying them to act as sales representatives to boost revenues for its medicines improperly.

Someone involved with GSK’s Middle East operations reported the alleged corrupt practices in Iraq — which are said to have begun in 2012 but continue to this day — to executives in the UK, the Wall Street Journal reported. The emails claim that the alleged malpractice violated both the US Foreign Corrupt Practices Act and Britain’s Bribery Act.

“We are investigating allegations of improper conduct in our Iraq business. We have zero tolerance for unethical or illegal behaviour,” a GSK spokesman said. “These allegations relate to a small number of individuals in the country. However, we are investigating whether there has been any improper conduct.”

The latest probe comes as Chinese authorities continue to investigate claims that GSK funnelled up to three billion yuan (£291 million) in cash, as well as offering “gifts”, including prostitutes, to doctors and officials in the Asian powerhouse to raise sales.

GSK’s Chinese sales plunged 61% in the third quarter of last year and 18% in the final quarter after its offices were raided by Chinese police and staff were arrested.

The group is still co-operating with Chinese authorities, and the US Department of Justice, the US Securities and Exchange Commission and the UK Serious Fraud Office have all been informed of the investigation.

GSK’s pharma business in Iraq is far smaller, with fewer than 60 employees, but the damage to its reputation of these claims — so soon after the China allegations which chief executive Sir Andrew Witty denounced as “shameful” — could be vast. Shares fell 14.4p to 1562.6p, as the City waited for more details to digest.

Savvas Neophytou, pharma analyst at Panmure Gordon, said: “The company has good processes which allowed them to uncover corrupt behaviours — which, it must be said, are not uncommon in that part of the world.”

In its annual report, published in February, GSK admitted that “illegal acts similar to those alleged to have occurred in China have occurred elsewhere in the group.”

It also warned of the possibility the “Chinese business is not supportable in light of the subsequent decline in trading and the potential impact on future business”.

But Witty — who received a pay packet of £7.2 million for 2013, when GSK was rocked by that Chinese bribery scandal — has described himself as an “extreme bull” on GSK’s emerging market prospects.

Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'