Glaxo accused of being China bribe ringleader

 
Suzie Neuwirth
FOUR senior GlaxoSmithKline executives have been detained in China, the country’s police force said yesterday, as it accused the pharmaceutical giant of being the ringleader in a ¥3bn (£320m) bribery scandal.

Chinese authorities allege that the FTSE 100 firm bribed officials and doctors in the country through travel agencies to boost sales illegally and hike medicine prices.

Gao Feng, head of the economic crimes investigation unit at China’s Ministry of Public Security, said that since 2007 GSK had transferred as much as ¥3bn to more than 700 travel agencies and consultancies. The Ministry of Public Security said last week that GSK executives in China had confessed to bribery and tax violations.

Gao gave no examples of how the bribery involving the GSK executives worked. He said there were also instances of “sexual bribery”, although he did not elaborate.

A GSK spokesperson said that the company “will cooperate fully with the Chinese authorities in the investigation of these new allegations” and “take all necessary action required by the outcome of this investigation.”

The firm has put an immediate stop to the use of the identified travel agencies and is conducting a review of all third party relationships.

It is understood that GSK still sees the situation as very fluid and is awaiting more information from the Chinese authorities before further action. On-the-ground operations continue as usual.