• Sat
  • Jul 26, 2014
  • Updated: 3:04am

GlaxoSmithKline

The London-based multinational drugmaker, also known as GSK, supplies key products such as vaccines in China, as well as drugs for lung disease and cancer. In 2013, the company was targeted by Chinese authorities over alleged corruption, price-fixing and quality controls.

NewsChina
CORRUPTION

GlaxoSmithKline boss places blame for bribery case on senior Chinese executives

PUBLISHED : Thursday, 25 July, 2013, 12:00am
UPDATED : Friday, 26 July, 2013, 3:16am

Andrew Witty, the chief executive of Britain's biggest drug company, GlaxoSmithKline (GSK), said yesterday that much of the blame for the investigation of his company on the mainland appeared to rest on senior Chinese executives.

"We have been told by the Chinese authorities that it appears certain senior Chinese executives [of GSK] appear to have broken Chinese laws and defrauded the company and the Chinese health-care system," Witty told a press conference in London. "This appears to involve individuals working outside GSK's controls and acting inappropriately in the market."

No allegations had been made against GSK China chief Mark Reilly or head of China finance Steve Nechelput, both Britons, he said.

Reilly is not in China, while Nechelput is on the mainland and has been barred from leaving by the authorities.

Four senior Chinese executives of GSK have been detained on the mainland: 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 .

Mainland authorities allege that GSK used travel agencies to funnel nearly three billion yuan (HK$3.8 billion) in kickbacks to doctors, hospitals and other groups and that unnamed GSK managers took bribes from travel agencies, including sexual favours from prostitutes.

Witty said: "They are shameful allegations. If they are true, that is very disappointing.

"We have more than 100,000 employees. I'm strongly of the view that 99.99 per cent of the people in our organisation are operating by the rules this company stands by."

We have more than 100,000 employees. I'm strongly of the view that 99.99 per cent of the people in our organisation are operating by the rules this company stands by

GSK would commission an independent investigation into the China scandal engulfing the company, he said, adding: "We are absolutely committed to getting to the bottom of what is going on."

GSK had also been in contact with regulators in Britain and the United States, Witty said.

As a company listed in both New York and London, GSK could be charged under the US Foreign Corrupt Practices Act and Britain's Bribery Act if its executives were found guilty of bribery on the mainland.

"We remain committed to China. We continue to see the country as a place for investment," Witty said, adding that it was also committed to making its prices affordable on the mainland.

In an English-language commentary on its website yesterday, state-controlled Xinhua said it would "not be surprising if more pharmaceutical companies and hospitals, domestic or international, are involved in probes in the days to come".

Three Chinese employees of another international drug firm, AstraZeneca, had been questioned by mainland police, a spokeswoman for the Anglo-Swedish giant confirmed yesterday.

On July 19, AstraZeneca's Shanghai office was visited by Public Security Bureau officers regarding "a local police matter focused on one sales representative" who had been taken away for questioning, it said.

On Tuesday, officers asked to speak to two AstraZeneca managers with whom the sales representative had worked. One of them was continuing to assist with their inquiries, it added.

 

Share

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

4

This article is now closed to comments

captam
The British Government should get in on this and investigate why pharmaceutical company reps have also been offering group practice doctors and pharmacists cash "perks" within the United Kingdom...... for years! Don't tell me it only happened in China. Of course the bosses must have known. Its despicable for expat bosses to blame this only on locally employed staff.
caractacus
That is what happens when doing business in China. Why though, is it that so far only two foreign companies have been investigated? Could this be a ploy by a PRC company to damage the competition?
newgalileo
Oh so easy, blame the local staff. What job were the foreign executives doing? They had no clue about all that? Was it failing in their job or sleeping at it? How can so much money "disappear"? Having worked in big multinationals where you have to explain ten times why you spent 10 usd for a lunch, come on.
chaz_hen
"I'm strongly of the view that 99.99 per cent of the people in our organisation are operating by the rules this company stands by."
I suggest he think again about that figure and adjust downward. A lot.
 
 
 
 
 

Login

SCMP.com Account

or