Four GSK China execs held for investigation

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Four senior executives from multinational pharmaceutical company GlaxoSmithKline (GSK) are being held by Chinese police on suspicion of having committed serious economic crimes, Xinhua has learned.

Four senior executives from multinational pharmaceutical company GlaxoSmithKline (GSK) are being held by Chinese police on suspicion of having committed serious economic crimes. [File photo]

The executives of GSK (China) Investment Co., Ltd., identified by their Chinese names, include vice president and operation manager Liang Hong, vice president and human resources director Zhang Guowei, legal affairs director Zhao Hongyan, and business development manager Huang Hong, according to the investigation team.

The four were once dubbed the GSK China's "quadriga."

In an interview with Xinhua, Liang, who supervises about 3,000 medical representatives across China to deal with hospitals and doctors, admitted 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.

Most of the bribes are thought to have been given through travel agencies.

The police have also held and questioned the corporate representative of a travel agency suspected of being involved in the case, according to the investigation team.


The team said the case was not uncovered by any "insider whistleblower" but just came to light in a police investigation.

During the first half of this year, police 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 has surprisingly surged from several million yuan at its start-up period in 2006 to about a hundred times the figure at present," a police officer from the investigation team told Xinhua.

A later probe indicated that GSK China and some of its affiliated enterprises were implicated and are prime suspects in the violations.

Weng Jianyong, corporate representative of the Linjiang Travel Agency, told Xinhua that he had a tacit agreement with GSK's Liang that Liang would offer him conference service business opportunities, and some of the payment to his agency would be given to Liang as kickbacks.

Between 2010 and this year, the bills for such "patronized business" have totaled 30 million yuan (4.87 million U.S. dollars) and the "due" kickback for Liang was about 2 million yuan.

Liang took some of the money and the rest was left to Weng to cover Liang's "non-reimbursable expenses."

Weng confessed that Liang had told him clearly that such "non-reimbursable expenses" are generally used as bribes to officials and experts.

"Sometimes, Liang tells me his bribery purposes over the phone and I prepare the money and deliver to the relevant person," he said.


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