UK fraud office demands drug firms' Iraq documents

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The watchdog is investigating possible breaches of the oil-for-food sanctions program, which was designed to allow the deposed regime of Saddam Hussein to sell limited amounts of oil to buy food and medicine.

LONDON (Reuters) - GlaxoSmithKline Plc <GSK.L> and AstraZeneca Plc <AZN.L> said on Sunday Britain's Serious Fraud Office has asked them to hand over confidential documents, following allegations bribes were paid to win contracts in Iraq.

The watchdog is investigating possible breaches of the oil-for-food sanctions program, which was designed to allow the deposed regime of Saddam Hussein to sell limited amounts of oil to buy food and medicine.

The drugmakers deny any wrongdoing and say they are cooperating fully with the authorities after receiving the request for documents.

"GSK does not believe that its employees or its agents in Iraq knowingly engaged in wrongdoing regarding the oil-for-food program," Glaxo, the world's second-largest drug company, said in a statement on Sunday.

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"In fact, GSK went to considerable lengths to cooperate with UK government authorities responsible for the UK administration of the program, and to impose anti-corruption measures when dealing with intermediaries in Iraq."

Notices were served earlier this month by the fraud office requiring the drug firms to give up e-mails, faxes, contracts and invoices, according to the Sunday Telegraph newspaper.

The probe follows a 2005 United Nations report compiled by Paul Volcker, the former chairman of the U.S. Federal Reserve, which listed more than 2,200 companies around the world that might have been linked to bribes paid to the Iraqi government.

Volcker concluded the oil-for-food program had become corrupt as Saddam's regime demanded kickbacks from foreign firms in return for lucrative contracts.

(Reporting by Ben Hirschler; editing by Sue Thomas)