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China accuses GSK staff of corruption, tax crimes

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(Globalpost/GlobalPost)

Senior managers of British drug firm GlaxoSmithKline (GSK) in China have confessed to bribery, "serious" business offences and tax crimes, police said Thursday.

"As a big multinational pharmaceutical company, GSK China in recent years rampantly bribed some government officials, a number of pharmaceutical industry groups and funds, hospitals and doctors," the ministry of public security said in a statement.

The firm did so in order to sell products or raise prices, it said, adding that benefits were provided "via travel agencies and other channels in the form of direct bribery or sponsorship".

It also committed tax-related crimes, the statement said, following police investigations in the financial hub Shanghai and the central cities of Changsha and Zhengzhou.

"The case involves a large number of people, a long period of time, a huge value and its circumstances are vile," it added.

Some senior managers have confessed their wrongdoings in preliminary interrogation, the statement said, without specifying the suspects' nationalities.

The inquiry was continuing.

It is common practice in China for pharmaceutical firms to offer doctors and hospitals bribes to have their products used, industry insiders say.

GSK is one of the largest multinational pharmaceutical companies in China with total investment of more than $500 million, according to its website.

Officials at GSK said they could not immediately comment when contacted by AFP Thursday.

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http://www.globalpost.com/dispatch/news/afp/130711/china-accuses-gsk-staff-corruption-tax-crimes