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* GSK says investigating alleged "improper conduct" in Iraq
* Allegations relate to small number of staff in country
* Iraq issue follows claims of extensive corruption in China (Fixes typo in first paragraph)
By Ben Hirschler
LONDON, April 6 (Reuters) - Drugmaker GlaxoSmithKline, already facing corruption accusations in China, is nowinvestigating allegations of bribery in Iraq, the Britishcompany said on Sunday.
The latest controversy centres on claims that the companyhired government-employed physicians and pharmacists in Iraq aspaid sales representatives to improperly boost use of itsproducts.
"We are investigating allegations of improper conduct in ourIraq business. We have zero tolerance for unethical or illegalbehaviour," a company spokesman said.
The investigations are ongoing.
GSK employs fewer than 60 people in its pharmaceuticalsoperation in Iraq and the allegations relate to a small numberof individuals in the country, the spokesman added.
Britain's biggest drugmaker was accused by Chineseauthorities in July of funnelling up to 3 billion yuan ($483million) to doctors and officials to encourage them to use itsmedicines in a case that rocked the pharmaceuticals industry.
GSK sales in China, where the company has a staff of around7,000, plunged in the wake of the scandal and it has recentlydismissed some employees in the country and withheld bonusesfrom others as it seeks to root out wrongdoing.
While a number of major drugmakers have faced investigationsinto their overseas practices under the U.S. Foreign CorruptPractices Act (FCPA), GSK's problems in China have been unusualin being spearheaded by local Chinese officials.
GSK has previously described the Chinese corruptionallegations as "shameful" and the company recently took steps totighten procedures, including a move to stop the practice ofpaying doctors to speak on its behalf.
The latest allegations concerning Iraq were first reportedby the Wall Street Journal, which said it had reviewed emailsfrom a person familiar with GSK's Middle East operations citingalleged corrupt practices in Iraq, including continuing issuesand alleged misconduct dating from last year and 2012.
One of the emails said the malpractices appeared to violateboth the FCPA and the British Bribery Act, both of whichprohibit bribery of foreign officials.
GSK said that operating in emerging markets was"challenging", given the issues that many countries face infunding their healthcare systems, but the spokesman said thefirm remained committed to providing medicines in multiplemarkets.
Building up business in developing economies is an importantplank of GSK's growth strategy and Chief Executive Andrew Wittyhas described himself as an "extreme bull" on emerging marketprospects.
Last week, the drugmaker announced plans to invest up to 130million pounds ($216 million) in Africa. It has also recentlybuilt up stakes in local operations in India and Indonesia.
($1 = 0.6028 British Pounds) (Editing by Eric Walsh)
