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China Identifies Suspects In Drug Bribery Probe

Mon, 07/15/2013 - 7:50am

BEIJING (AP) -- Chinese police have identified four executives of drug manufacturer GlaxoSmithKline who they accuse of paying millions of dollars in bribes to doctors and others, a state news agency reported Monday.

The police ministry announced last week that GSK employees were under investigation for paying bribes that were passed through travel agencies. It said the bribes were aimed at increasing sales.

Four employees being questioned include a vice president and human resources director of Glaxo's Chinese unit, the Xinhua News Agency said.

The report said at least 50 million yuan ($8.2 million) passed through a travel agency as part of a scheme to hide the bribes. It said one suspect had authority to approve a budget of hundreds of millions of yuan (tens of millions of dollars) but did not say how much of that might have been used for bribery. Calls to the police ministry were unanswered.

The scheme helped the employees circumvent GSK's rules that limited gift-giving to 300 yuan ($50) per recipient, Xinhua said.

GlaxoSmithKline PLC said last week it would cooperate with the authorities.

"If evidence of such activity is provided we would of course act swiftly on it," said a company statement.

The police ministry said last week GSK employees were suspected of paying bribes to doctors, hospitals, medical associations and government officials.

Citing investigators, Xinhua identified the employees as Liang Hong, vice president and operations manager; Zhang Guowei, vice president and human resources director; Zhao Hongyan, legal affairs director, and Huang Hong, business development manager.

Investigators also have questioned the corporate representative of the Shanghai Linjiang International Travel Agency, Xinhua said. It cited an unnamed investigator who said most of the agency's business came from laundering money for the bribery scheme.

According to Xinhua, the corporate representative of the travel agency, Weng Jianyong, said he had an agreement with Liang to give his agency business and in exchange he would kick back some of the money.

GlaxoSmithKline said in June it had investigated an accusation that its salespeople in China bribed doctors and found no evidence of wrongdoing. The company has said the police investigation might be based on information from the same anonymous source.

GSK is headquartered in Britain but has a presence in the United States, which could make it liable to penalties under U.S. anti-bribery laws.

Last week, state media reported the government was investigating production costs for 60 foreign and domestic drug companies in a possible first step toward changing state-set maximum prices. The announcement gave no indication any companies were suspected of wrongdoing.

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