Inside Track: Under fire Glaxo should get a grip
SIR Andrew Witty has been keeping his head down in recent weeks, as GlaxoSmithKline (GSK) seeks a cure for what ails it in China.
It hasn’t been difficult to see GSK’s bunker mentality in evidence: at Wimbledon, its hospitality marquee was shorn of corporate branding, a flaccid attempt to disguise a legitimate business activity.
If only its Chinese problems could be made to disappear as easily as its logo.
To recap: Beijing has accused Britain’s biggest drugs company of involvement in a major bribery scandal, with a covert sex tape starring Mark Reilly, GSK’s country head, adding to the lurid nature of the situation.
The allegations would be serious under any circumstances, but GSK has managed to compound the impression of a company lurching from one prematurely-worded denial of responsibility to the next.
Its immediate response should have involved following the examples of Barclays and Rolls-Royce, and appointing an independent figure to oversee a full investigation.
For investors, the news that the secret trial of Peter Humphrey (the private investigator hired by GSK but who has since apparently turned against his former paymasters) is to begin early next month may therefore be more welcome than it seems.
The sooner they gain clarity about the extent of the company’s problems in China, the better. But many more mis-steps in the handling of the affair and questions might also start to be asked about the future of those at the very top of GSK.
MANDELSON VS MILIBAND
Charm offensive or offensive charm? Ed Miliband’s determination to repackage Labour as a pro-business party is logical, if insincere. Ten months before the general election, he faces the prospect of a torrent of anti-Labour letters signed by City grandees winging their way towards the pages of national newspapers.
They may not be responsible for costing him many votes directly, but they will be seized upon by both coalition partners as evidence that Labour would not be a responsible steward of the economy.
Miliband’s assault on big business has been expressed principally in tirades against banks and energy companies, but the unwillingness of FTSE 100 bosses more generally to declare support for him is telling.
I’m told that last month, Lord Mandelson, the former business secretary, hosted a dinner attended by, among others, Rick Haythornthwaite, the Centrica chairman; his predecessor, Sir Roger Carr; Iain Conn, the BP executive who looks likely to be the next Centrica boss; David Cumming of Standard Life Investments; and Michelle Pinggera, a senior Goldman Sachs executive.
According to one insider, Lord Mandelson expressed frustration at the tone of Miliband’s public statements about big business, describing them as “unhelpful”.
He was right – and the Labour leader’s comments about the need for “great, dynamic businesses” a few days later suggest that Lord Mandelson has been having a quiet word in his ear.
Some sectors of Britain’s economy do lack competition, and require reform. Indiscriminate attacks implying that all big companies are as bad as each other is a stupid way to approach it.
FIX THE NAME AND YOU’RE GOLDEN
If it ain’t broke, don’t fix it. Sadly, that old adage doesn’t apply to most financial indices, which in cosmetic terms at least look pretty broken.
So proposals announced yesterday to open the London Gold Fixing to new external oversight – which mirror moves at other benchmark-supervisors – are sensible.
There’s something else that London Gold Market Fixing Limited would be well-advised to do: change the name of the process.
Mark Kleinman is the City editor at Sky News @MarkKleinmanSky