GlaxoSmithKline finance boss banned from leaving China

PUBLISHED : Thursday, 18 July, 2013, 12:00am
UPDATED : Thursday, 18 July, 2013, 4:14am

A British executive heading the mainland financial operations of GlaxoSmithKline (GSK) has been barred from leaving China as the government ratchets up the pressure on the pharmaceutical sector with a new campaign.

Steve Nechelput, who is based in Shanghai, was asked not to leave the country late last month but was not formally detained or arrested, as part of the government's investigation into GSK, a London spokesman for the UK drug giant said. "He continues in his role as GSK finance chief for China."

Some senior GSK executives and those of other companies have given testimony to the Chinese authorities in a widening probe into suspected commercial bribery and tax crimes, Ministry of Commerce spokesman Shen Danyang said at a press conference in Beijing yesterday.

The GSK spokesman declined to reveal what, if any, information had been gleaned from Nechelput by the Chinese authorities.

Late last month, Chinese police detained several employees of GSK in Beijing, Shanghai and Changsha. At least four executives from GSK's China operations were detained: vice- president and business operations general manager Liang Hong; vice-president and human resources supervisor Zhang Guowei; legal affairs supervisor Zhao Hongyan; and business development general manager Huang Hong.

The authorities said GSK had paid nearly three billion yuan (HK$3.8 billion) in kickbacks to doctors, hospitals and other groups to make them prescribe their drugs.

From 2006 to June 2012, Nechelput was GSK Asia-Pacific finance vice-president in Singapore. He has worked for the London and New York-listed company since at least 1990, according to his LinkedIn profile.

In February 2011 he was photographed receiving an award with two other people for the best trade finance solution in Hong Kong during FinanceAsia's 2010 awards dinner.

Yesterday the China Food and Drug Administration (CFDA) announced a campaign to crack down on illegal drug production and illegal pharmaceutical operations, and strengthen the supervision of the nation's drug industry.

The campaign, which will run until December, will target drug producers, pharmaceutical companies, clinics, traditional Chinese medicine firms and illegal online drug sales. CFDA vice-minister Yin Li said illegal drug production and sales were rampant in some areas.

"This campaign must be resolute in punishing severely illegal activities, exposing illegal companies and recalling problematic products," said another CFDA vice-minister, Wu Zhen.