GSK execs in bribery probe are identified
Source: Agencies |
July 16, 2013, Tuesday
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Print Edition
Print Edition
Four senior executives from UK pharmaceutical company GlaxoSmithKline held by Chinese police on suspicion of having committed serious economic crimes were named yesterday.
They are Liang Hong, vice president and operations manager with GSK (China) Investment Co Ltd; Zhang Guowei, its vice president and human resources director; legal affairs director Zhao Hongyan; and business development manager Huang Hong.
Liang, who supervises about 3,000 medical representatives across China to deal with hospitals and doctors, admitted in an interview with Xinhua news agency that he had been "in contact with" senior government officials and medical experts.
He said he was authorized to approve an annual budget up to hundreds of millions of yuan.
The Ministry of Public Security announced last week that some senior executives from GSK China were being investigated for suspected bribery and tax-related violations.
The suspects are believed to have offered large bribes to government officials, medical industry associations and foundations, hospitals and doctors in order to expand the company's market in China and raise the price of its medicine.
At a press conference in Beijing yesterday, police accused GSK of channeling bribes to Chinese officials and doctors through travel agencies.
Since 2007, the company had transferred as much as 3 billion yuan (US$489 million) to more than 700 travel agencies and consultancies, said Gao Feng, head of the economic crimes investigation unit at the Ministry of Public Security.
Gao said: "We have sufficient reason to suspect that these transfers were conducted illegally. You could say the travel agencies and GSK were criminal partners. Among the partners, GSK was mainly responsible. In a criminal organization there is always a leader."
Gao said police had uncovered information during their investigation that pointed to similar money transfers made by other multinational pharmaceutical companies in China.
He did not name any other foreign companies.
GSK said yesterday it was cooperating with the authorities.
"We are deeply concerned and disappointed by these serious allegations of fraudulent behavior and ethical misconduct by certain individuals at the company and third-party agencies," it said in a statement. "Such behavior would be a clear breach of GSK's systems, governance procedures, values and standards. GSK has zero tolerance for any behavior of this nature."
It said GSK was reviewing all third-party agency relationships, and had "put an immediate stop on the use of travel agencies that have been identified so far in this investigation and we are conducting a thorough review of all historic transactions related to travel agency use."
GSK said it respects China's laws and expects its staff to abide by them.
During the first half of this year, police said they had found abnormalities with the operation of the Shanghai Linjiang International Travel Agency.
"It was only keeping contact with some pharmaceutical enterprises and hardly doing ordinary tourism business. However, its annual turnover surged from several million yuan at its start-up period in 2006 to about 100 times the figure at present," a police officer told Xinhua.
They are Liang Hong, vice president and operations manager with GSK (China) Investment Co Ltd; Zhang Guowei, its vice president and human resources director; legal affairs director Zhao Hongyan; and business development manager Huang Hong.
Liang, who supervises about 3,000 medical representatives across China to deal with hospitals and doctors, admitted in an interview with Xinhua news agency that he had been "in contact with" senior government officials and medical experts.
He said he was authorized to approve an annual budget up to hundreds of millions of yuan.
The Ministry of Public Security announced last week that some senior executives from GSK China were being investigated for suspected bribery and tax-related violations.
The suspects are believed to have offered large bribes to government officials, medical industry associations and foundations, hospitals and doctors in order to expand the company's market in China and raise the price of its medicine.
At a press conference in Beijing yesterday, police accused GSK of channeling bribes to Chinese officials and doctors through travel agencies.
Since 2007, the company had transferred as much as 3 billion yuan (US$489 million) to more than 700 travel agencies and consultancies, said Gao Feng, head of the economic crimes investigation unit at the Ministry of Public Security.
Gao said: "We have sufficient reason to suspect that these transfers were conducted illegally. You could say the travel agencies and GSK were criminal partners. Among the partners, GSK was mainly responsible. In a criminal organization there is always a leader."
Gao said police had uncovered information during their investigation that pointed to similar money transfers made by other multinational pharmaceutical companies in China.
He did not name any other foreign companies.
GSK said yesterday it was cooperating with the authorities.
"We are deeply concerned and disappointed by these serious allegations of fraudulent behavior and ethical misconduct by certain individuals at the company and third-party agencies," it said in a statement. "Such behavior would be a clear breach of GSK's systems, governance procedures, values and standards. GSK has zero tolerance for any behavior of this nature."
It said GSK was reviewing all third-party agency relationships, and had "put an immediate stop on the use of travel agencies that have been identified so far in this investigation and we are conducting a thorough review of all historic transactions related to travel agency use."
GSK said it respects China's laws and expects its staff to abide by them.
During the first half of this year, police said they had found abnormalities with the operation of the Shanghai Linjiang International Travel Agency.
"It was only keeping contact with some pharmaceutical enterprises and hardly doing ordinary tourism business. However, its annual turnover surged from several million yuan at its start-up period in 2006 to about 100 times the figure at present," a police officer told Xinhua.
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