GSK used travel agencies for China bribes: police

Mon Jul 15, 2013 10:29am EDT
 
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By Michael Martina

BEIJING (Reuters) - Chinese police on Monday accused British drugmaker GlaxoSmithKline of channeling bribes to Chinese officials and doctors through travel agencies to boost sales illegally and raise the price of its medicines in the country.

The charges make the GSK case the highest profile corporate investigation in China since four executives from mining giant Rio Tinto were jailed in March 2010 for taking bribes and stealing commercial secrets.

Gao Feng, head of the economic crimes investigation unit at China's Ministry of Public Security, said since 2007, GSK had transferred as much as 3 billion yuan ($489 million) to more than 700 travel agencies and consultancies over six years.

Four senior Chinese executives from GSK had been detained, Gao said at a news conference. The Ministry of Public Security had said last week that GSK executives in China had confessed to bribery and tax violations.

GSK said it was deeply concerned by the developments and had stopped using the travel agencies identified by the investigation. It said it was reviewing all third party agencies and all historic transactions related to the travel agencies.

"GSK shares the desire of the Chinese authorities to root out corruption," it said in a brief statement. "These allegations are shameful and we regret this has occurred."

GSK supplies key products such as vaccines in China, as well as drugs for lung disease and cancer.

Sources familiar with the situation said GSK's general manager for China, Mark Reilly, had left the country for London 10 days ago to attend routine meetings and was now working in Britain, where he is in regular contact with the team in China.   Continued...

 
A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai in this July 12, 2013 file photo. REUTERS/Aly Song/Files