GlaxoSmithKline Fires staff in China for Overstating Expenses
Facing bribery allegations in China, GlaxoSmithKline the pharmaceutical giant dismissed a number of its employees there over the failure to comply with rules for expenses, a person who is familiar with the situation announced Friday.
The biggest drug maker in Britain declined comment over the details of the sacking of employees but did confirm it had increased its monitoring of claims on expenses, resulting in the company taking action against a number of employees.
Taking a closer look at the staff in China comes following accusations by authorities in China last July that the pharmaceutical giant had funneled as much as $483 million as expenses to officials and doctors to help encourage use of its medicines.
A spokesman for the company said the GSK routinely monitors and checks the expense claims of its employees to ensure adherence to company policies. Since the beginning of the ongoing investigation by Chinese authorities the company, said the spokesman, has increased its overall monitoring in the country of China.
The spokesman continued by saying where the company found potential issues they were thoroughly reviewing each one and in cases have withheld the payments of incentives when deemed appropriate.
The Britain based company declined to specify how many members of their staff were involved in the latest crackdown but one source indicated the number of employees had been a small proportion of the total workforce in China for GlaxoSmithKline, which is close to 7,000.
Previously GSK had said some of its Chinese executives looked as though they had broken Chinese law. The company also said its company policy is zero tolerance for the use of bribery calling the allegations that have taken place in China shameful.
The claims of corruption have hurt GSK’s overall business in China, which though still small had been expanding at a quick rate.
Prior to the scandal, sales in China for GSK had increased by 14% from year over year during the three months that end in June, but sales have plunged by 61% during the third quarter, and 29% during the final three months of 2013.