Witty admits Glaxo errors in China and says probe will hit business

 
Suzie Neuwirth
GLAXOSMITHKLINE’S business will inevitably be impacted by the Chinese bribery allegations, chief executive Sir Andrew Witty said yesterday, as he admitted the drugmaker’s internal controls had failed to pick up on problems.

Speaking at the FTSE 100-listed firm’s second-quarter results presentation, Witty said Glaxo plans to commission an independent review into the “shameful allegations”, adding that he was ready to go to China at “the right moment”.

He said it appeared that senior executives in China had acted to defraud the company and the healthcare system, but head office had no knowledge of the situation.

Witty refused to confirm whether he would give up his bonus in light of the scandal, saying “That is really a matter for the board to consider at the right time”.

A spokesperson from shareholder advisory group Pirc spoke out against Witty’s possible bonus, telling City A.M. that “companies must start taking account of ethical failings” and that the remuneration committee should consider withdrawing any future awards.

The pharma giant’s group turnover grew just two per cent in the second quarter, while earnings per share edged up one per cent.

Shares closed 0.5 per cent higher at £16.81.