China investigates GSK executives for bribery, tax violations

BEIJING - Some senior executives from multinational pharmaceutical company GlaxoSmithKline (GSK) are being investigated for suspected bribery and tax-related violations, Chinese police said Thursday.

Police have questioned some suspects from GlaxoSmithKline(China) Investment Co Ltd, according to a statement issued by the Ministry of Public Security.

The statement described their suspected offenses as "serious economic crimes," adding that the ministry is directing police forces in Shanghai, as well as central China's provinces of Hunan and Henan, in the probe.

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 and raise the price of its medicine, the statement said.

The bribes were generally given through travel agencies or in the guise of "project sponsorships," the statement said.

GSK is also suspected of being involved in tax-related crime, including illegal cashing by falsely issuing exclusive value-added tax invoices and colluding with travel agencies to write false invoices and issue fake invoices in order to finance their illegal acts, according to the ministry.

It is believed that the offenses have been occurring for some time, involving a large number of people and significant amounts of money, the statement said.

Moreover, some GSK senior executives are also suspected of using their positions to accept kickbacks and bribes from travel agencies.

The statement said some travel agency employees are being held as suspects and are being questioned by police.

The statement said police have obtained sufficient evidence, adding that the suspects have already confessed to the offenses.