GSK share price: Drugmaker investigates alleged bribery in Iraq

on Apr 7, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Monday, April 7: GlaxoSmithKline Plc (LON:GSK) is investigating allegations of bribery in Iraq, Reuters has reported. The probe opens a new front for the company which is already engulfed in a corruption investigation in China.

GSK’s share price closed 0.35 percent higher at 1,582.45p in London on Friday.
**Alleged bribery in Iraq**
Reuters yesterday quoted the UK pharma giant as confirming that it was looking into allegations of bribery in Iraq.
“We are investigating allegations of improper conduct in our Iraq business,” a company spokesman told Reuters. “We have zero tolerance for unethical or illegal behaviour.”

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The statement came with the Wall Street Journal (WSJ) reporting earlier that it had reviewed emails from an unidentified person familiar with GSK’s operations in the Middle East citing alleged corrupt practices in Iraq, including continuing issues and alleged misconduct dating from last year and 2012. One of the emails said that the malpractices appeared to violate both the US Foreign Corrupt Practices Act (FCPA) and the British Bribery Act, both of which address bribery of foreign officials.

The WSJ quoted the person as saying in an email that GSK had hired 16 government-employed physicians and pharmacists in Iraq as paid sales representatives for the company while they continued to work for the government.
The GSK spokesman told Reuters that operating in emerging markets was “challenging”, given the issues which many countries face in funding their healthcare systems but that the drugmaker remained committed to providing medicines in multiple markets.

**China woes**

The report of the Iraq probe comes in the wake of GSK’s corruption scandal in China where the company was accused of having funnelled more than 3 billion yuan (£323 million) to doctors and health officials to persuade them to prescribe its drugs. (GSK Share Price: Chinese VP of Operations Confesses to Bribery)

Last week, news emerged that GSK had dismissed staff in China in recent months following increased monitoring of employee expense claims. (Glaxo said to be cutting staff in China)
The corruption scandal has dealt a blow to GSK’s ambitions in China, one of the world’s fastest growing pharma markets. GSK’s pharmaceutical and vaccine sales in the country slumped 61 percent in the third quarter of 2013, and another 29 percent in the fourth quarter.
**On April 4, buy GSK shares at 1,577.00p.**
**On April 4, sell GSK shares at 1,576.00p.**

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