Novo Nordisk To Pay $9M Related To Iraq Oil-For-Food Kickbacks 

May 11, 2009
The Wall Street Journal
Original Source:  http://online.wsj.com/article/BT-CO-20090511-713968.html http://online.wsj.com/article/BT-CO-20090511-713968.html

Novo Nordisk A/S (NVO) agreed to pay $9 million to settle allegations of illegal kickbacks paid to the former Iraqi government under the U.N.'s oil-for-food program, according to U.S. Department of Justice. 
The Danish-based pharmaceutical company, which makes insulin and other diabetes treatments, agreed to pay the fine as part of a deferred prosecution agreement with the department, which is pursuing an investigation into the U.N. program. 
The oil-for-food program was designed to allow the government of Iraq, which was facing international sanctions, to sell oil in exchange for food, medical supplies and other humanitarian needs. Payments under the program were supposed to be made to a U.N.-controlled escrow account, not directly to the Iraqi government. 
In the agreement, the Department of Justice said Novo acknowledged responsibility for improper payments made by its agents to the former Iraqi government in order to obtain contracts with the Iraqi ministry of health to provide insulin and other medicines. 
A representative from Novo wasn't immediately available for comment. 
According to the agreement, between 2001 and 2003, Novo paid about $1.4 million to the government by inflating the price of contracts by 10% before submitting the contracts to the U.N. for approval and concealed from the U.N. the fact that the price contained a kickback to the government. 
Novo also admitted it inaccurately recorded the kickbacks as commissions in it books, the department said. 
Novo also agreed to pay about $3 million in civil payments and $6 million in disgorged profits. 
Dozens of companies have been accused of alleged corruption and violations under the oil-for-food program, with companies including Chevron Corp. (CVX) and El Paso Corp. (EP) already agreeing to pay millions in fines for alleged violations. 
Novo's American depositary shares were down 0.1% at $48.88 in recent trading.