GSK chief Andrew Witty set to address kickback claims

Andrew Witty

GlaxoSmithKline chief executive Andrew Witty will probably discuss the central government's bribery investigation into the British drug giant when the company presents its earnings this week, a spokesman for the company said.

The spokesman declined to say whether Witty would use the company's second-quarter results press conference on Wednesday to admit "major failings" by the firm's Chinese operations, as The Daily Telegraph of London reported yesterday.

Chinese authorities have accused GSK of using local travel agencies to funnel nearly three billion yuan (HK$3.8 billion) in kickbacks to doctors, hospitals and other groups who prescribed their drugs.

The travel firms in turn provided GSK managers with kickbacks of their own, including sexual favours from hired women, authorities have alleged.

Four senior Chinese executives of the firm have been detained, while Steve Nechelput, the British head of GSK's China finance operations, has been barred from leaving the country.

A GSK team led by Abbas Hussain, GSK's president of emerging markets, was in China to deal with the investigation, the firm's London-based spokesman said.

However, he would not comment on whether Witty would personally visit China to address his company's problems, as The Telegraph reported.

Meanwhile, Vice-Premier Wang Yang has called for the acceleration of reforms of China's food-and-drug regulations, according to the People's Daily, the Party's main mouthpiece. Wang made his remarks during a tour of Shandong and Jiangsu provinces that ended on Friday.

The actions come as part of a nationwide crackdown on the pharmaceutical sector by the China Food and Drug Administration which was announced last week and is expected to last until the end of the year.

Shanghai Linjiang International Travel Agency at the centre of the scandal has been ordered to halt its business because of "illegal activities", including fake billing, the Shanghai tourism administration said earlier.

The GSK spokesman reiterated the company's deep concern and disappointment over the allegations. He said it shared the desire of Chinese authorities to root out corruption.

"These allegations are shameful," the spokesman said.

The company, which is listed in London and New York, said that it had suspended the use of all travel agencies and was investigating all of its third-party partnerships in China.

This article appeared in the South China Morning Post print edition as GSK chief Witty set to address kickback claims

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