GlaxoSmithKline to Pay $20 Million to Settle SEC Bribery Probe
September 30 2016 - 5:20PM
Dow Jones News
GlaxoSmithKline PLC agreed to pay $20 million to settle charges
that the drugmaker's Chinese subsidiaries engaged in bribery
schemes to increase sales in the Asian country, the Securities and
Exchange Commission said Friday.
The SEC alleged that between 2010 and 2013, GlazoSmithKline's
subsidiary and a China-based joint-venture violated the Foreign
Corrupt Practices Act by providing inappropriate gifts to foreign
officials, including health-care professionals. The commission also
alleged that the payments were often falsely recorded as legitimate
expenses.
The bribes took the forms of gifts, improper travel and
entertainment with no or little educational purpose, shopping trips
and cash, among others, the SEC said in its order.
GSK entered into the SEC agreement without confirming or denying
the charges, the U.S. agency said in its statement.
In a separate statement, GSK said it has installed several
reforms, including shifts to the compensation of sales
representatives and the end of payments to health-care
practitioners for advocating for GSK products to other
prescribers.
"The U.S. Department of Justice has also concluded its
investigation into these matters and will be taking no further
action," GSK said in a prepared statement. "The SEC and DOJ
investigations were initiated as part of an industry-wide inquiry
in 2010."
A DOJ spokesman declined to comment.
In 2014, a Chinese court found the company guilty of bribery and
penalized GSK $491.5 million, which was touted at the time by
Chinese state media as the largest-ever corporate fine in
China.
Five of the company's managers, including Mark Reilly, its
former top China executive, were also convicted of bribery-related
charges and received suspended prison sentences.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
September 30, 2016 17:05 ET (21:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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