GSK reviews third-party relations in China

15 July 2013

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16 July 2013 | Adam Leach

GlaxoSmithKline (GSK) has launched a review into all of its previous transactions with travel agencies in China, following the arrest of a number of its executives over allegations of bribery.

It follows a disclosure from the Chinese police, which believes multiple senior figures at the firm used travel agents as intermediaries to channel payments to medical professionals. The police, which described the offences as “serious economic crimes”, suspect the payments were used to get medical professionals to buy GSK products.

In response to the allegations, a spokesman for GSK said: “We are deeply concerned and disappointed by these serious allegations of fraudulent behaviour and ethical misconduct by certain individuals at the company and third-party agencies. Such behaviour would be a clear breach of GSK's systems, governance procedures, values and standards. GSK has zero tolerance for any behaviour of this nature.”

Since the police announced the investigation, the firm has taken a number of actions. It is reviewing “all historic” transactions with travel agencies in the country and will also examine its compliance procedures for China. All dealings with agencies involved in the investigation have been suspended.

As part of the same investigation, Chinese police are looking at allegations that representatives from the firm colluded with travel agents to write false invoices, and if that breached tax laws.

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