GlaxoSmithKline ($GSK) CEO Andrew Witty isn't allowing bribery allegations against his company in China to sway his determination to do business there. At least that's what GSK is saying today, as Witty joins U.K. prime minister David Cameron and 100 other business execs on a trade mission to the country.
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| GSK CEO Andrew Witty |
It's Witty's first visit to China since authorities there alleged in July that the company funneled about $490 million in bribes through travel agencies to Chinese doctors to meet aggressive sales-growth targets. GSK's sales in China plummeted 61% in the quarter ended in September, as hospitals there turned away the British company's salespeople in the wake of the ensuing investigation.
Witty declined to comment on the investigation in a Reuters report on today's trade mission, but a GSK spokesman called the CEO's tour "an important opportunity to show our continued commitment to China and to supplying our medicines to the country."
GSK has been under fire since the scandal erupted, and not just in China. In September, the U.S. Justice Department began investigating China's allegations. Because GSK's shares are listed in the U.S., the company is vulnerable to prosecution under the Foreign Corrupt Practices Act (FCPA), which prohibits paying overseas officials for the purpose of winning or retaining business.
Several pharma companies have acknowledged probes under the FCPA of late, including Merck ($MRK), AstraZeneca ($AZN) and Eli Lilly ($LLY). GSK could also face scrutiny under Britain's anticorruption laws. Company officials continue to maintain they did not know about the alleged bribes in China.
The only bit of good news in this China drama came in early November, when reports emerged that GSK likely won't be facing corruption charges there. Still, its Chinese executives might be charged, and authorities are reportedly weighing "astronomical" fines against the company.
Witty told Reuters today that GSK would have more news on the China investigation "quite soon."
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