GSK boss to address China scandal at quarterly results: sources
By Ben Hirschler
LONDON (Reuters) - GlaxoSmithKline (GSK.L: Quote) Chief Executive Andrew Witty will detail what action the drugmaker is taking in response to allegations of bribery against it in China when he presents quarterly results on Wednesday, sources familiar with the matter said.
Chinese authorities are investigating GSK deals with travel agencies worth up to 3 billion yuan ($489 million) that they allege were used to facilitate bribes. The scale of the payments has fuelled debate as to whether GSK surveillance systems were up to the job of spotting wrongdoing.
Although an internal company investigation has yet to conclude, people familiar with the matter said Witty would discuss what may have gone wrong in the scandal, which has rocked GSK's reputation and left its management in China in disarray.
"He will give his perspective on what appears to have gone on and how it can be put right," one of the sources said on Sunday.
Britain's biggest drugmaker, which has described the allegations as "shameful", has already hired Ernst & Young to conduct an independent review of its systems in China and sent three senior executives to lead the response on the ground.
A company spokesman said it was also keeping all relevant regulators updated as appropriate. The charges from China could expose GSK to prosecution under Britain's Bribery Act and the U.S. Foreign Corrupt Practices Act.
GSK declined to comment further ahead of the second-quarter results, which are due at 1100 GMT on July 24.
Despite the crisis, the company's shares have held up - reflecting the fact that China accounts for only around 3 percent of sales. Continued...