Former GSK China head & others charged with corruption

Pharmaceuticals giant GlaxoSmithKline Plc's (GSK's) former China head Mark Reilly and two of his colleagues have been charged with corruption by Chinese police.

Announcing the move, a Ministry of Public Security official said that Reilly and two Chinese executives, viz. Zhang Guowei and Zhao Hongyan, were charged for paying bribes to doctors and hospitals. The officials were also suspected of bribing officials in the country's industry & commerce department.

The Ministry of Public Security official said, "(GSK) departments offered bribes to hospitals and doctors as well as personnel to boost their sales. The money involved was in the billions of yuan (hundreds of millions of dollars)."

The officials have been charged after a ten-month-long investigation into the matter. The bold step reflects China's growing determination to eradicate corruption and corporate bribery, which are partly responsible for driving up prices for consumers.

The allegations made a big dent in the reputation of the drugmaker, forcing it to overhaul its China business model, though the head office repeatedly claimed that it had no knowledge of alleged wrongdoing by the officials.

Following the revelation of the scandal, GSK's China sales slipped 61 per cent and 29 per cent in the third and fourth quarters of 2013, respectively.

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