GSK finance head not allowed to leave

LONDON?- Beijing is preventing GlaxoSmithKline's head of finance for China from leaving the country, as police accuse the British drugmaker of bribing officials and doctors, a spokesman for the drugmaker said on Wednesday.

The travel restriction on Steve Nechelput was imposed at the end of June, since when he has continued to carry out his work and remains free to move around the country. He has not been questioned, arrested or detained by police, the spokesman added.

Police have accused GSK of transferring up to 3 billion yuan ($489 million) to 700 travel agencies and consultancies over six years to facilitate a campaign of corruption. In response, GSK said it was deeply concerned by the allegations, which it called "shameful".

The action against Nechelput, a British national, underscores the pressure on GSK as China launched a crackdown on the pharmaceutical sector.

A British foreign ministry spokesman said it stood ready to provide consular assistance. Asked if London was concerned about the travel restriction, he added: "If there's an inquiry under way then that's a matter for the Chinese authorities."

Nechelput's boss Mark Reilly, GSK's general manager for China, left the country for Britain on July 5 in order to attend what a source familiar with the situation said were a series of routine meetings.

Four senior Chinese executives from GSK have been detained by police, including vice president and operations manager Liang Hong, who said he had funnelled money through travel agencies by arranging conferences, some of which were never held.

With investigations focused on malpractice by certain of GSK's Chinese employees, one industry insider said it was likely China wanted Nechelput to remain in the country to provide financial information, if needed, as inquiries progress.

China is increasingly important for big drug groups, which rely on growth in emerging markets to offset slower sales in Western countries where many former top-selling medicines have lost patent protection.

IMS Health, which tracks pharmaceutical industry trends, expects China to overtake Japan as the world's second-biggest drugs market behind the United States by 2016.

Separately, GSK said its chief executive Andrew Witty was stepping down from his role on the board of the UK government's department for business at the end of 2013, as had always been planned. "His decision is not related in any way to the current issues the company is facing in China," GSK said.

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