China blocks GSK finance head from leaving country

Wed Jul 17, 2013 7:57pm EDT
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By Ben Hirschler

LONDON (Reuters) - Chinese authorities investigating the alleged bribery of doctors and officials by GlaxoSmithKline (GSK.L: Quote) have stopped the drugmaker's head of finance for China, a British citizen, from leaving the country, a company spokesman said on Wednesday.

The travel restriction on Steve Nechelput was imposed at the end of June, but he has continued to work and remains free to move around China. Nechelput has not been questioned, arrested or detained by police, the spokesman said.

GSK has hired auditors Ernst & Young to carry out an independent review of its systems in China in the wake of the scandal, according to a person familiar with the situation.

It has also sent internal auditors to China as part of an effort to get to the bottom of what happened, the source added.

On Monday, Chinese police accused GSK of bribing officials and doctors to boost sales and raise the price of its medicines in China. They said GSK transferred up to 3 billion yuan ($489 million) to 700 travel agencies and consultancies over six years to facilitate the bribes.

Britain's biggest drugmaker said it was deeply concerned by the developments, which it called "shameful".

The action against Nechelput underscores the pressure on GSK, which has come attack in Chinese state media this week.

The British Foreign Ministry said it stood ready to provide consular assistance to Nechelput.   Continued...

A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag (C) and a Union Flag (R), outside a GlaxoSmithKline office building in Shanghai July 12, 2013. REUTERS/Aly Song