GlaxoSmithKline's Chinese reps demand to be repaid for bribes, FT reports

GlaxoSmithKline's ($GSK) top brass is already up against potential penalties in China and the U.K. for the bribery scandal that broke last summer. But now, it's taking heat from within the company, the Financial Times reports. Junior Chinese employees say they want to be repaid for bribes their superiors ordered them to pay.

According to China-based sales staff, Glaxo has denied bonuses, threatened firing or refused reimbursement for bribery, the FT says. The employees say they paid for sham versions of official expense receipts to disguise cash bribes and in-kind gifts to physicians and hospitals.

"The expenses were paid with our own money, and although the receipts were not compliant, it was our managers who told us to buy the fake receipts," a former Glaxo salesman told the paper.

The protests haven't been private, either; the FT reports that disgruntled staffers sent 25 representatives to raise a banner at GSK headquarters in Shanghai. Message: "Return my hard-earned money."

As the FT notes, GSK has upped its scrutiny of expense claims in China since a whistleblower claimed that employees used travel agencies to funnel $489 million in bribes to doctors and other healthcare professionals. GSK staffers were ordered to turn over their bank records to Ernst & Young auditors to prove they actually paid merchants for goods and services. Those who couldn't lost out on expense reimbursements and year-end bonuses.

But the FT's sources say they were warned not to implicate supervisors who directed them to pay bribes. That forced lower-ranking salespeople to take the financial hit. And it's not petty cash they're clamoring for, either; many of the affected employees say they're owed tens of thousands of renminbi after following their bosses' instructions.

Glaxo, for its part, admitted in April that "a very small number" of its 7,000 China-based employees had been let go following audits. Time and again, the company has repeated that such practices have no place at the pharma giant. This time, the company tells the FT that it welcomes "employees speaking up if they have concerns."

In an effort to clean up the drugmaker's act, CEO Andrew Witty has put an end to individual sales quotas and doctor speaking fees globally, and Glaxo has brought in new management to oversee the Chinese sales force and handle marketing. 

But bribery claims haven't stopped rolling in, with investigations now ongoing in 9 Middle Eastern countries and Poland. Nor has Glaxo learned what price the company or its former staffers will pay for the scandal; GSK is subject to punishment in China, Britain and the U.S., while former China head Mark Reilly and at least two of his associates face prison time in China.

- see the FT story (reg. req.)

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