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Actions in China ‘shameful’ says GSK boss

Published on 25/07/13 at 08:51am
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GlaxoSmithKline has admitted that allegations of corruption at its China business are ‘shameful’ and will seek out its cause.

Speaking to reporters after the release of its Q2 results yesterday, the firm’s chief executive Sir Andrew Witty said GSK is setting up an independent review by US law firm Ropes & Gray into the probe.

The ‘deeply disappointing’ allegations, as Sir Andrew called them, relate to an ongoing investigation into the company’s use of travel agencies, which Chinese authorities say were used by GSK to launder around £200 million worth of bribes to doctors.

The firm admitted that these allegations involved senior Chinese staff, but added that they worked around its systems, defrauding the company as well as the Chinese healthcare system.

Sir Andrew said that he and the head office ‘had no knowledge’ of the situation. “This looks like a number of individuals that have worked outside our systems,” he said. “It would have been difficult to find using our controls.”

He told reporters: “The alleged activities are not what we expect of our people and are totally contrary to our values. Clearly, we are likely to see some impact to our performance in China as a result of the current investigation, but it is too early to quantify the extent of this.”

This is the first time that GSK’s chief executive has spoken in public about the now three-week old Chinese probe into the company, which has now seen four senior GSK executives detained in the country with others barred from leaving.

Sir Andrew said he was ready to go to Beijing ‘at the right moment’, but gave no details as to whether he planned to go in the near future.

Its quarterly results show that GSK’s sales in China rose 14% in the second quarter to £212 million, which works out at just over 3% of its total global turnover.

GSK supplies products such as vaccines in China, as well as drugs for lung disease and cancer and has begun building medium-sized manufacturing and production sites in the country.

Ben Adams 

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