Novartis AG (NYSE:NVS) is cruising murky waters this time around. This is after reports came out that its subsidiary known as Sandoz was found guilty of gross misconduct. Sandoz has admitted to the Justice Department that it was a part of several conspiracies.
No way out for Sandoz
The Justice Department has expressed its satisfaction in the way the investigations were conducted. The nature of the evidence is such that Sandoz finds no loophole to deny the charges leveled against it. Novartis has advised this subsidiary to co-operate in the best way possible even though the effects of the conspiracy have jeopardized the business.
Novartis is watching a reputation it has build over so many years go up in flames! It is an incident that is going to impact investor confidence a huge deal. The business guru admits that what Sandoz was wrong and it tarnishes their name a great deal. However, havoc has occurred already, and the only way out is to follow the course of the law.
Carol Lynch is the president of Sandoz at the moment, and she seems to be distancing herself a great deal from the misconduct. He deems it a major nightmare for the business, saying that it occurs at a point where they had started witnessing some desirable financial results.
The official outlines that her leadership has done a lot to ensure that no such things happened. For instance, she had spearheaded some training programs to ensure that the workers adhered to the best business practices. She also believes that all the workers understood the various antitrust compliance policies from a wider-context of meaning. It doesn’t add up to her how matters escalated to such a point where Sanders was now facing such serious allegations.
Reports indicate that the subsidiary will be paying fine amounting to about $195 million, which is a pretty hefty amount, according to analysts. Sandoz agreed to sign a deferred prosecution agreement after realizing that it is limited in terms of the available options. The reports coming out indicate that the misconduct happened between 2013 and 2015.