GlaxoSmithKline executive in China TV 'confession'

http://www.bbc.co.uk/news/business-23332521

Version 0 of 1.

One of four senior GlaxoSmithKline executives detained in China over allegations of corruption has made a confession on state television.

The executive, a Chinese national, confessed to paying bribes and said his actions had pushed up drug prices.

It comes a day after Chinese officials accused the British pharmaceutical giant of paying 3bn yuan ($489m; £323m) in bribes since 2007.

GSK has called the allegations shameful and promised full cooperation.

It said in a statement last week that its own internal inquiries had found no evidence of bribery or corruption in China, but it took the allegations seriously and was willing to co-operate with the authorities.

Closely watched

The senior executive appeared dishevelled during his appearance on the main evening bulletin, the BBC's Martin Patience reports from Beijing.

He was one of four Chinese executives from GSK arrested over the allegations. The firm's British general manager in China, Mark Reilly, is reported to have left for London last month and has not returned.

Chinese police on Monday said GSK had used more than 700 travel agencies and consultancies in which to transfer hundreds of millions in bribes in the last six years.

Chinese newspapers alleged that the travel agencies would invent fictitious conferences that required staff travel, and the budget would then be used to bribe doctors to prescribe GSK drugs.

"We have sufficient reason to suspect that these transfers were conducted illegally," said Gao Feng, head of the economic crimes investigation unit. "You could say the travel agencies and GSK were criminal partners."

Mr Gao said investigators had so far not received any information from GSK's British headquarters.

GSK said in a statement that it "shares the desire of the Chinese authorities to root out corruption".

The firm said it was "taking a number of immediate actions", including severing links with the travel agencies identified in the investigation and "conducting a thorough review of all historic transactions related to travel agency use".

Our correspondent says GSK's reputation has already taken a huge hit and it is still not clear what fines or punishments it may face.

But how this case is handled will be very carefully watched by other multinationals operating here, he adds.