U.K. Investigates Glaxo, AstraZeneca Over Oil-For-Food Scandal

The Serious Fraud Office of the United Kingdom is investigating pharmaceutical giants GlaxoSmithKline (GSK) and AstraZeneca (AZN) for bribery of Iraqis during the UN's oil-for-food program. The companies, which have been asked to turn over documents to the SFO, say they are complying with all such requests and deny any impropriety. Glaxo said it "does not believe that its employees or its agents in Iraq knowingly engaged in wrongdoing regarding the oil-for-food programme," while AstraZeneca denied "any allegation of unethical behavior on our part in our trading relationships with Iraq." The SFO's investigation into "issues relating to the breaches of the embargo (against Iraq)" is expected to last up to three years and to cost about £22 million ($44 million). The oil-for-food program permitted Iraq to sell oil in exchange for humanitarian goods to which its access was limited by sanctions. Saddam swindled over $17 billion from the program, in part by smuggling goods and in part by demanding kickbacks from over 2,000 companies, according to a 2005 U.S. report. Glaxo shares closed down 1.1% Friday at $50.75; AstraZeneca shares closed off 0.87% at $43.12.

Sources: Wall Street Journal, MarketWatch, Bloomberg

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