GSK sends three executives to China to handle crisis

Fri Jul 19, 2013 10:39am EDT
 
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By Ben Hirschler

LONDON (Reuters) - GlaxoSmithKline has sent its head of emerging markets and two other top executives to China to lead the drugmaker's response to an unfolding crisis over alleged bribery and corruption.

Abbas Hussain, GSK President Emerging Markets, was dispatched by Chief Executive Andrew Witty, along with the group's global head of internal audit and a senior legal official, a person familiar with the matter said on Friday.

All three have now arrived in the country to cooperate with Chinese authorities and try to get to the bottom of a scandal that has shaken confidence in GSK's internal procedures.

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.

The decision to send the executives shows the seriousness with which Britain's biggest drugmaker views a situation that threatens its reputation and risks undermining business in a big, fast-growing market.

GSK said it was deeply concerned by the allegations, which it called "shameful".

The drugmaker has also hired auditors Ernst & Young to carry out an independent review of its systems in China, another source said on Wednesday.

China has detained four senior Chinese executives and banned GSK's finance chief in China, Steve Nechelput, from leaving the country.   Continued...

 
A Chinese employee walks into a GlaxoSmithKline (GSK) office in Beijing, July 19, 2013. REUTERS/Jason Lee