Allegations of GSK corruption spread to Syria




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By Ben Hirschler

LONDON (Reuters) – GlaxoSmithKline (GSK.L) faces new allegations of corruption, this time in , where the drugmaker and its distributor have been accused of paying bribes to secure business, according to a whistleblower’s email reviewed by Reuters.

Britain’s biggest drugmaker said on Thursday it was investigating the latest claims dating back to 2010, which were laid out in the email received by the company on July 18.

The allegations relate to its former consumer healthcare operations in , which were closed down in 2012 due to the worsening civil war in the country.

“We have zero tolerance for any kind of unethical behavior. We will thoroughly investigate all the claims made in this email,” GSK said in a statement.

GSK has been rocked by corruption allegations since last July, when Chinese authorities accused it of funneling up to 3 yuan ($480 million) to doctors and officials to encourage them to its medicines. The former British boss of the drugmaker’s business was accused in May of being behind those bribes.

Since then, smaller-scale bribery claims have surfaced in other countries and GSK is now investigating possible staff misconduct in Poland, Iraq, Jordan and Lebanon.

is the sixth country to be added to the list. The allegations there center on the company’s consumer business, including its popular painkiller Panadol and oral care products.

Although rules governing the of non-prescription products are as strict as for prescription medicines, the email from a person familiar GSK’s Syrian operations said alleged bribes in the form of cash, speakers’ fees, trips and free samples were in breach of corruption laws.

The detailed 5,000-word document, addressed to Chief Executive Andrew Witty and Judy Lewent, chair of GSK’s audit committee, said incentives were paid to doctors, dentists, pharmacists and government officials to tenders and to obtain improper business advantages.

“GSK has been engaging in multiple corrupt and illegal practices in Syria and its internal controls for its Syrian are virtually non-existent,” the email said.

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In addition, the email said GSK had engaged in apparent Syrian export control violations, including an alleged smuggling scheme to ship the drug component pseudoephedrine to Iran from Syria via Iraq. Pseudoephedrine is regulated as a precursor for making methamphetamine.

GSK said it would investigate this matter along the bribery claims.

“We welcome speaking up if they have concerns about alleged misconduct,” the company said.

“On 18 July 2014, we received an email making claims regarding GSK’s former consumer operations and related distributors in Syria. compliance and legal departments were immediately notified and, as is standard procedure, we immediately responded to the sender to confirm receipt and ask for information.”

The whistleblower’s email said GSK used its own employees and Syrian distributor Maatouk Group to make illicit payments.

An official at Damascus-based Maatouk had no comment when contacted by telephone and said the company’s top executives were immediately available.

HOLIDAY RESORT

The email listed a range of alleged improper activities, including payments of $1,500 each to two doctors to promote Panadol. The document also highlighted bribes paid to pharmacists and payments for medics to visit a Mediterranean holiday resort.

Further cash payments were related to the of GSK cold and flu products, as well as its premium toothpaste brand Sensodyne.

Bribery charges around the world have tarnished the reputation of Witty and hit the company’s sales in , at a time when it is also struggling sluggish sales growth in the all-important U.S. market.

The allegations also leave it open to legal action – and potentially hefty fines – in Western countries where it is based or has a stock market listing.

Britain’s Serious Fraud Office launched a formal criminal investigation into GSK’s overseas activities in May and the U.S. Department of Justice (DOJ) is investigating it for possible breaches of the Foreign Corrupt Practices Act (FCPA).

In the email sent to GSK concerning Syria, the author said that the information would be passed on to the DOJ and the U.S. Securities and Exchange Commission (SEC).

A recently introduced SEC program provides cash incentives for whistleblowers to report corporate malpractice, including breaches of the FCPA.

GSK has overhauled its marketing policies in the wake of concerns about possible past misconduct. It aims to become the first company in the industry to stop paying outside doctors to promote its products.