GSK fires 110 staff in China after corruption scandal

GlaxoSmithKline has dismissed more than 100 staff in China as a result of its internal investigation into the corruption scandal for which it was fined £300m last year.

The action is the biggest round of dismissals by GSK in China since the UK drugmaker was found guilty by a Chinese court in September of bribing doctors to prescribe its medicines.

GSK would not confirm the number of staff involved but people familiar with the situation indicated it was about 110 out of a total 7,000 employees in China.

The group said it had increased monitoring of expense claims, strengthened its compliance efforts and hired external investigators to review its Chinese operations.

"Based on the findings, we have taken disciplinary action against employees whose conduct contravened GSK's values and code of conduct. We have zero tolerance for this kind of behaviour."

The firings were related to misconduct that took place before mid-2013, GSK added.

In its annual report published last week the group revealed that the number of whistleblower allegations against staff in China rose to 652 in 2014 from 48 the year before.

GSK was found to have funnelled billions of renminbi to hospitals, doctors and government officials through a programme of "massive and systemic bribery" aimed at boosting sales in one of the world's biggest and fastest-growing drug markets.

While last September's fine brought a close to the Chinese criminal probe, GSK could yet face penalties from the UK Serious Fraud Office and the US Department of Justice, which both have the power to prosecute companies for corruption overseas.

GSK said it remained fully committed to China and had "implemented fundamental policy reforms to ensure the company operates to the highest standards".

The scandal has badly damaged the group's reputation in China at a time when it is also struggling with a decline in sales of its core respiratory drugs in the US.

It was revealed last week that Sir Andrew Witty, chief executive, saw his total pay cut almost in half last year to £3.89m because of the corruption and sales setbacks.

Sir Christopher Gent, chairman, said: "The illegal activities of GSK China were a clear breach of GSK's governance and compliance procedures and are wholly contrary to the values and standards expected."

Repairing the group's standing in China will be among the priorities for Sir Philip Hampton, outgoing chairman of Royal Bank of Scotland, when he succeeds Sir Christopher at the helm of GSK's board in May.

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