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SFO bribery investigation into GSK opens old wounds

Published on 09/02/18 at 11:00am

A small titbit of information was buried within GSK’s financials this week, which threatens to bring up old news that the company would rather leave forgotten.

It relates to the China bribery scandal that rocked GSK in 2013 and for years after, as it was forced to pay hundreds of millions to settle cases with the Chinese and US governments.

In the latest twist to the saga, GSK revealed that the UK’s Serious Fraud Office (SFO) had asked for additional information on “third party advisors” that had been hired by the company during the investigation.

The SFO began its investigation into the UK-based company back in 2014 and the case has been ongoing since then.

The original case was one of the most salacious in pharmaceutical industry history, when an investigation by Chinese authorities revealed that the company had funnelled money through a travel company to doctors in order to boost sales.

Mark Reilly, then head of the Chinese business, came under intense media pressure as a sex tape was released at the same time as a whistleblower revealed the company’s actions.

During this period, GSK hired a third-party private investigator, Peter Humphrey, to track the whistleblower. Humphrey and his wife were later jailed in China for breaching privacy laws and endured a two year prison sentence as a result.

The company itself did not reveal many more details, only saying in a statement, “GSK is co-operating and responding to these requests. The Group has also informed the SEC and DOJ of these matters and is responding to their requests for additional information. The Group is unable to make a reliable estimate of the expected financial effect of these matters, and no provision has been made for them”.

The case is expected to conclude sometime this year, with previous suggestions being that it will be prior to David Green’s departure as Director of the SFO in April of this year.

Ben Hargreaves

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