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GlaxoSmithKline routed China bribes via travel agencies: Police

Chinese police on Monday accused British drugmaker GlaxoSmithKline (GSK) of channelling bribes to Chinese officials and doctors through travel agencies to boost sales

Written by Reuters | Beijing |
July 16, 2013 3:01:40 am

Chinese police on Monday accused British drugmaker GlaxoSmithKline (GSK) of channelling bribes to Chinese officials and doctors through travel agencies to boost sales illegally and raise the price of its medicines in the country.

Gao Feng,head of the economic crimes investigation unit at China’s Ministry of Public Security,said since 2007,GSK had transferred as much as 3 billion yuan ($489 million) to more than 700 travel agencies and consultancies over six years.

Four senior Chinese executives from GSK had been detained,Gao said at a news conference. The ministry had said last week that GSK executives in China had confessed to bribery and tax violations.

GSK said it was deeply concerned by the developments and had stopped using the travel agencies identified by the investigation. It said it was reviewing all third party agencies and all historic transactions related to the travel agencies.

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“GSK shares the desire of the Chinese authorities to root out corruption,” it said in a brief statement. “These allegations are shameful and we regret this has occurred.”

GSK supplies key products such as vaccines in China,as well as drugs for lung disease and cancer.

The official People’s Daily newspaper said GSK collaborated with travel agencies to funnel bribes to doctors and officials by creating fake “conference services” as expenditure for GSK to misappropriate funds,some of which would be spent on bribes.

Gao gave no examples of how the bribery involving the GSK executives worked.

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