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Glaxosmithkline Labeled Crime Boss, Accused of Bribes in China

By Shannon Ellis
Staff Writer

SHANGHAI ‑ Officials in China said a number of executives at Glaxosmithkline plc (GSK) are now officially under investigation “for suspicions of serious economic crimes” that potentially involve deals worth ¥3 billion (US$488 million). The Ministry of Public Security said GSK used travel agencies to make payments to government officials, pharmaceutical associations, hospitals and doctors. Authorities also claim that GSK staff faked tax invoices.

In a rare press conference on Monday, police referred to GSK as a criminal “boss” working with more than 700 travel agencies since 2007 as part of the scheme.

GSK responded, saying that "these allegations are shameful and we regret this has occurred."

On July 11, the Ministry of Public Security said Public Security Bureaus (PSB) from the cities of Changsha, Shanghai, and Zhengzhou had put the company under suspicion after a joint investigation.

The PSB said a number of senior staff were involved in “commercial bribery and tax related crimes.” At least one executive, whom the PSB said has confessed, had accepted kickbacks and bribes.

GSK has put an immediate stop to use of travel agencies named in the investigation and will be conducting a review of past travel agency use and third party relationships in the country. GSK further stated that "such behaviour would be a clear breach of GSK's systems, governance procedures, values and standards."

For GSK, this latest news follows a string of bad press coming out of China for the last few months.

 

See Tuesday's BioWorld Today for More on This Story.