GlaxoSmithKline to Pay $20 Million to Settle SEC Bribery Probe

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 [e-mail]

(END) Dow Jones Newswires

September 30, 2016 17:05 ET (21:05 GMT)

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