GlaxoSmithKline's Consumer Health Business Also Investigated, New Documents Say

Published: Sep 10, 2014

GlaxoSmithKline's Consumer Health Business Also Investigated, New Documents Say

September 10, 2014

By Jessica Wilson, Breaking News Staff

Pharmaceutical giant GlaxoSmithKline began investigating bribery in its Chinese consumer healthcare business as early as 2012, according to internal documents of the company examined by Reuters, the news service said Wednesday.

This investigation is in addition to the corruption probe into the company’s Chinese pharmaceutical division revealed in July 2013.

The internal documents show the company began to examine compliance with “procurement policies” by issuing preservation notices in 2012, which is often an early step in an investigation that direct employees to refrain from destroying any documents.

“The preservation notices issued in 2012 relate to allegations around adherence to procurement policies within our Chinese consumer healthcare business,” said Simon Steel, British-based spokesman for GSK, in a statement. “We investigated using resources inside and outside the company and did not find evidence of unethical conduct, but did identify some non-compliance with our procurement procedures and remedial action was taken as a result.”

Glaxo emphasized that the notices do not prove wrongdoing by the company or its partners. But the significance of an investigation that may have suspected bribery or other ethical violations is not lost on investors or analysts, who have worried in recent months that wrongdoing had spread farther in the company than previously reported.

Reuters received the internal documents from an anonymous source within the company who has direct knowledge of the investigation” and who told the news service that “even some senior staff working on compliance in China had been surprised at how far the investigation had gone.” The source specifically stated, “ The notices didn't just generally ask about GSK's processes, but listed specific named suppliers.”

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