Chinese police investigate GSK

The British drugmaker allegedly paid bribes through travel consultancies.

New Statesman
GSK logo. Photograph: Getty Images.

The Chinese police are investigating into GlaxoSmithKline’s more than 3bn Yuan ($374m) transactions, as they found evidence that the British drugmaker used more than 700 travel agencies since 2007 to pay bribes to the country’s officials and doctors in order to boost its sales.

The Chinese police detained four executives of GlaxoSmithKline (GSK) on charges of offering bribes to the officials and doctors.

Of the four officials, one is a China-born Australian, while the other three are Chinese citizens.

Releasing the details of preliminary investigation, the head of the economic crimes investigation unit Gao Feng said that the British drug giant had transferred 3bn Yuan (or £323m) to travel agencies and consultancies since 2007, reported Reuters.

Feng added: “We have sufficient reason to suspect that these transfers were conducted illegally.”

GSK, however, has denied charges of corruption in its internal investigation, and assured to cooperate with the Chinese authorities.

Furthermore, China is probing GSK for tax-related issues.

Last week, the Chinese Ministry of Public Security said that executives of GSK have admitted to bribery.

For GSK, China is a huge market, which is become the world’s second largest pharmaceutical hub by 2016.

Gao alleged that GSK’s top China executive had left the country following the announcement of investigation and had not returned yet, reported the Financial Times.