The UK Serious Fraud Office said Friday it has closed bribery investigations into UK-based GlaxoSmithKline PLC and individuals at subsidiaries of Rolls-Royce Holdings PLC.
SFO director Lisa Osofsky said in a statement 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 these cases.”
In a response filed with the London Stock Exchange, GSK said it was “pleased that the SFO have closed their investigation and concluded that no further action is required.”
In 2016, London-based GSK paid the U.S. Securities and Exchange Commission $20 million to settle FCPA violations in China. The SEC found that subsidiaries there spent millions of dollars on pay-to-prescribe schemes for several years to pump up drug sales.
The FCPA offenses spanned at least 2010 to 2013 and involved gifts, improper travel and entertainment with no or little educational purpose, shopping excursions, family and home visits, and cash, the SEC said.
GSK agreed to pay the $20 million civil penalty without admitting or denying the SEC’s findings.
The DOJ didn’t prosecute GSK for the China FCPA offenses.
In September 2014, a court in Changsha, China fined GSK $490 million following a conviction for bribery.
GSK’s former head of China operations, Mark Reilly, was given a suspended three-year prison sentence and then deported.
Other China nationals working as GSK executives were sentenced to between two and four years in prison.
China authorities accused GSK of paying $482 million in bribes to health officials and doctors to boost sales. China’s Ministry of Public Security said in 2013 that GSK had used 700 travel agents to deliver illegal payments since 2007.
The SFO began investigating GSK’s sales practices in China and other countries in 2014.
UK-based Rolls-Royce reached an $800 million global settlement in early 2017 with UK, U.S., and Brazilian authorities.
The company entered into deferred prosecution agreements with the DOJ and SFO. In the UK enforcement action, Rolls-Royce admitted paying bribes or failing to prevent bribery in China, India, Indonesia, Malaysia, Nigeria, Russia, and Thailand from 1989 to 2013.
The company makes engines and generators for the aerospace, defense, marine, and energy sectors.
The SFO said in the statement Friday “there will be no prosecution of individuals associated with the company.”
It said Rolls-Royce “is continuing to comply with the terms of the Deferred Prosecution Agreement including in relation to its compliance program.”
In the United States, the DOJ has charged at least six individuals, including three former Rolls-Royce employees, for their roles in the overseas bribery. Four have pleaded guilty.
Robert Barrington of Transparency International UK criticized the SFO’s Rolls-Royce decision. He said Friday it was “absurd that yet again a company can admit to bribery and yet neither the bribe payers nor the management team that allowed the crime to happen are held responsible.”
“It is hard to believe that the interests of justice have been served or that there has been proper acknowledgement of the victims of the crime,” Barrington said.
The FCPA Blog | February 25, 2019