Drugmaker GlaxoSmithKline (GSK) used travel agencies and consultancies as vehicles to bribe officials and doctors and illegally boosted the sales prices of its drugs sold in China, police said on Monday (July 15).
Since 2007 the company had transferred as much as 3 billion yuan ($488.80 million) to over 700 travel agencies and companies, Gao Feng, a police official in charge of the investigation into the company, told a news conference.
The investigation had found GlaxoSmithKline was chiefly responsible for the bribes, including instances of sexual bribery, Gao said. Four senior Chinese executives have been detained.
The ministry said on Thursday that GSK executives in China had confessed to bribery and tax violations during one of a string of investigations into foreign firms in the world's second-biggest economy.
Until Monday, Chinese authorities and state media had released few details on the probe into Britain's biggest drugmaker, one of a string of investigations into foreign firms and their pricing practices in the world's second-biggest economy.
The official People's Daily newspaper said GSK collaborated with travel agencies to funnel bribes to doctors and officials by creating fake "conference services" as expenditure for GSK in order to misappropriate funds, some of which would then be spent on bribes.
Xinhua, quoted one of the detained executives as saying medicine which cost 30 yuan (around £3) to make could end up being sold to patients for 300 yuan.
GSK officials were not immediately available for comment on Monday.
Under China's legal system, formal charges would only be announced after preliminary investigations are completed.
Presented by Adam Justice