China halts travel agency’s business over GSK case: report

Thu Jul 18, 2013 9:13am EDT

BEIJING (Reuters) – Authorities in Shanghai have suspended the business of a travel agency in connection with allegations of bribery against British drugmaker GlaxoSmithKline (GSK.L), the official Xinhua news agency said on Thursday.

Chinese police have started investigating suspected involvement by the Shanghai Linjiang International Travel Agency in illegal activities such as falsifying bills, it said without elaborating.

The travel agency has been ordered to suspend its business and carry out an internal overhaul, it said.

Reuters was not immediately able to reach the travel agency for comment.

Chinese police on Monday accused GSK of bribing officials and doctors to boost sales and raise the price of its medicines in China. They said GSK transferred up to 3 billion yuan ($489 million) to 700 travel agencies and consultancies over six years to facilitate the bribes.

Britain’s biggest drugmaker has said it was deeply concerned by the developments, which it called “shameful”. IDnL4N0FL09V

Police have detained four senior Chinese executives from GSK, including vice president and operations manager Liang Hong, who told state television this week he had funneled money through travel agencies by arranging conferences, some of which were never held. That money was then used to pay bribes.

(Reporting by Kevin Yao. Editing by Jane Merriman)