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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, the ministry of public security 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," said the ministry, which is in charge of China's police, 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, and the inquiry was continuing.

It did not specify the suspects' citizenships, but in London the Foreign Office said it was providing consular assistance to a British national.

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.

A spokeswoman for the firm said it was willing to co-operate with the inquiry, adding: "This is the first official communication GSK has received from the police in relation to the specific nature of its investigation.

"We take any allegations of bribery and corruption very seriously," the spokeswoman said in an email to AFP, adding that it had found "no evidence of bribery or corruption of doctors or government officials" in China.

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http://www.globalpost.com/dispatch/news/afp/130711/china-accuses-gsk-staff-corruption-tax-crimes-0