GlaxoSmithKline Chief Executive Officer Andrew Witty said the drugmaker will commission an independent review to investigate the root cause of alleged fraudulent behavior among senior executives in China.

Allegations this month by the Chinese government that Glaxo bribed hospitals, doctors and health officials prompted Witty to dispatch his head of emerging markets to China to oversee the London-based company’s response. Some senior executives appear to have acted outside of Glaxo’s processes and controls to both defraud the company and the Chinese health-care system, Witty said Wednesday.

“To see these allegations made about people working for Glaxo is shameful,” he told reporters on a second-quarter earnings conference call in his first public statement since the investigation was disclosed. “We are absolutely committed to rooting out corruption and we are also absolutely committed to getting to the bottom of what’s happened here.”

Witty refused to offer detail on the criminal investigation, but portrayed the company as being a victim of people “acting outside of our processes.” He insisted that “99.9” percent of GSK’s employees play by the rules.

He also insisted the company itself did not know about the fraud.

“It appears some individuals have let us down,” he said.

Witty also said the scandal will probably hurt the drugmaker’s sales in his first public statement since the investigation was disclosed.

“We are likely to see some impact to our performance in China as a result of the current investigation, but it is too early to quantify the extent of this,” Witty said in a statement. “We are co-operating fully with the Chinese authorities in this matter.”

In the later conference call, Witty said the allegations are “to me personally deeply disappointing,” according to Reuters. He also plans to commission an independent review of GSK’s operations in China and that he may visit China himself, the news service said.

Glaxo’s sales in China rose 14 percent in the second quarter to 212 million pounds ($325 million). China accounts for slightly less than 3.5 percent of the company’s global pharmaceutical revenue and is less profitable than its Western businesses, according to Mark Clark, an analyst at Deutsche Bank AG in London. Glaxo had sales of about 1 billion pounds in China last year.

Allegations this month by the Chinese government that Glaxo bribed hospitals, doctors and health officials prompted Witty to dispatch his head of emerging markets to China to oversee the London-based drugmaker’s response, which included a statement that some senior executives may have broken the law. Glaxo had said in June that it found “no evidence of corruption or bribery” there after a four-month internal investigation.

Simon Dingemans, GSK’s chief financial officer, echoed Witty’s remarks about China. Asked about the impact of the investigation in a video interview GSK published about its earnings, Dingemans said:

“Well, it’s still very early stages, but these are very serious allegations and we’re cooperating fully with the Chinese authorities. And we will take whatever actions are necessary to comply with the results of their inquiries.

“As for the business, it’s likely that there will be some impact for the China business, but it’s very early stages and to quantify that, again too early to tell at this stage.”

The probe “will slow down growth a bit in China, but it won’t irreparably damage the business there,” Alistair Campbell, an analyst at Berenberg Bank in London, who has a buy recommendation on Glaxo shares, said in a telephone interview. “Glaxo has a healthy portfolio of products. It’s also such a small percentage” of Glaxo’s overall sales.

China detained four senior Glaxo executives on suspicion of economic crimes, the ministry said July 15. Its finance chief in China, Steve Nechelput, has been unable to leave the country since the end of June because of the investigation, though he hasn’t been arrested or questioned, the company said last week. Mark Reilly, the head of Glaxo’s China pharmaceuticals business, returned to the U.K. on a planned business trip, according to the company.

Glaxo’s executives “violated China’s laws and damaged markets by engaging in bribery to raise drug prices, expand sales and reap inappropriate profits,” the Ministry of Public Security said in a statement posted on its website July 22. Abbas Hussain, Glaxo’s head of emerging markets, apologized on behalf of Glaxo and pledged to cooperate with the investigation, the ministry said, citing a recent meeting with the executive and his colleagues.

Separately, Glaxo reported second-quarter earnings excluding some items met expectations of 14 analysts surveyed by Bloomberg and were up slightly from a year ago.

Sales also were up 2 percent.

“We remain focused on managing our cost structure to reallocate our resources more effectively and invest behind our pipeline,” Witty added. “Our financial efficiency measures are also continuing to contribute and supported the delivery of core EPS growth of 4% in the quarter.”

The full earnings report can be read online.

GSK operates its North American headquarters in RTP. 

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