Dropped Glaxosmithkline inquiry20 Apr 2019 12:12
Dropped Glaxosmithkline inquiry cost Serious Fraud Office £7.5m
The Serious Fraud Office spent £7.5 million on its corruption investigation into Glaxosmithkline before dropping the high-profile case.
It abandoned the five-year inquiry into alleged bribery at the FTSE 100 pharmaceuticals group in February after Lisa Osofsky, its new boss, reviewed the agency’s caseload.
The criminal investigation had been among the SFO’s longest-running and involved one of Britain’s biggest companies. Glaxo is valued at £76 billion and was formed through the merger in 2000 of Glaxo Wellcome and Smithkline Beecham.
The costs of the inquiry have been disclosed after a freedom of information request.
Out of the £7.5 million spent by the fraud office, £2 million went on external costs. This was made up of £1.5 million for “non-permanent” staff, £376,343 on fees to counsel and £135,381 for “other investigation costs”, which included accommodation, translations, “data recovery” and “professional services”.
The SFO investigates and prosecutes businesses and individuals for serious or complex fraud, bribery and corruption. It was established in 1988, but its status has often been fragile, with Theresa May understood to have been keen to disband it while she was home secretary. Ms Osofsky, 57, joined as its director last August, replacing Sir David Green.
The agency’s investigation into Glaxo was launched in 2014 when Sir David, 65, was director. It was focused on Glaxo’s commercial operations in several countries, including China, where the drugs company was engulfed in a bribery scandal. Glaxo was fined about £300 million by China that year after being found guilty of paying bribes to boost sales of medical products.
The SFO’s decision to drop the case came after it had requested additional information regarding third-party advisers “engaged by the company in the course of the China investigations”. That prompted regulators in the United States, where Glaxo agreed a $20 million civil penalty with the US government in 2016, to investigate. Despite the SFO dropping its case, the US Securities and Exchange Commission and the Department of Justice have continued to investigate.
The SFO announced the decision to drop the Glaxo case at the same time that it dropped a six-year inquiry into alleged bribery and corruption by individuals associated with Rolls-Royce.
Ms Osofsky said she had concluded that there was “either insufficient evidence to provide a realistic prospect of conviction or it is not in the public interest to bring a prosecution”.
In a statement, Glaxo said it was “pleased that the SFO have closed their investigation and concluded that no further action is required”.
The decision to drop the Rolls case came despite the SFO securing a deferred prosecution agreement with the engineering group in 2017, when the company agreed to pay a £497 million settlement. Rolls, which makes engines for aircraft, had been accused of corrupt con
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