(Adds company statement and that U.S. Justice Department has
closed its case without charges, background, SEC case details)
By Sarah N. Lynch
WASHINGTON, Sept 30 GlaxoSmithKline Plc
will pay $20 million to settle civil charges that it masked
bribes to foreign officials in China by disguising them as
legitimate travel, entertainment and marketing expenses, U.S.
regulators said on Friday.
The pharmaceutical company agreed to settle the case with
the Securities and Exchange Commission without admitting or
denying any wrongdoing.
In a statement, the company said it had cooperated with the
SEC and it had received credit for taking steps to improve its
operations, such as changing how sales representatives are paid
and stopping the practice of paying healthcare professionals to
speak to doctors about the company's products.
It also said the U.S. Justice Department, which had opened a
parallel criminal investigation into the matter, was closing its
probe without any action against the company.
The SEC's $20 million civil settlement with GlaxoSmithKline
resolves the latest case to emerge from an industry-wide sweep
that started in 2010.
Since then, a number of other companies including Novartis
AG and AstraZeneca Plc have also settled
similar charges with the SEC.
In the case of GlaxoSmithKline, the SEC alleged that the
company's China-based subsidiary and a China-based joint venture
violated internal controls and record-keeping provisions of the
Foreign Corrupt Practices Act.
From 2010 through June 2013, the company's employees and
agents bribed officials in order to boost its sales through
increases in prescriptions and purchases by hospitals, the SEC
The payments came in the form of gifts, travel, shopping
excursions and cash, among other things, it added.
"The costs associated with these payments were recorded in
GSK's books and records as legitimate business expenses, such as
medical association sponsorships, employee expenses,
conferences, speaker fees and marketing costs," the SEC said.
(Reporting by Sarah N. Lynch; editing by Diane Craft)