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September 14, 2009

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Police quiz former Shen-mei staff

A FORMER employee of Shanghai Shen-mei Beverage & Food Co Ltd, one of Coca-Cola Co's biggest bottlers in Asia, is under police investigation for alleged corporate irregularities.

Shen-mei declined to disclose the name, gender or position of the person involved.

The firm said it is cooperating with police and has terminated the employee, reserving the right to take further legal action, according to a staff member who identified himself only by his surname of Chen.

Coca-Cola spokesman Kent Kaerhoeg confirmed to the New York Times yesterday that a female middle manager at the plant was detained by Shanghai police earlier this year and was subsequently dismissed by the bottler.

Shen-mei, which has its headquarters in the Jinqiao Export Processing Zone in Shanghai's Pudong New Area, is a joint venture of Coca-Cola China and local businesses. Its two bottling plants are located in Jinqiao and in Minhang District.

Earlier media reports said the person under investigation might be involved in taking about 10 million yuan (US$1.46 million) in bribes. Shen-mei declined to comment.

Several multinational companies were recently tainted by scandals of alleged irregularities in China.

Last month, the Shanghai prosecutor's office approved the arrest of four employees of Anglo-Australian mining giant Rio Tinto Ltd, including Stern Hu, an Australian citizen of Chinese origin and general manager of the firm's Shanghai office. Charges include bribery and illegally obtaining business secrets.

A widely read study on business corruption, published by China Youth Daily on August 4, said 64 percent of the 500,000 corruption cases China investigated in the past decade involved international trade and foreign businesses.

The report by Anbound Group, a domestic private economic analysis company, also said the number of commercial bribery cases involving multinational corporations had been on the rise.


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