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« Travel and Entertainment Expenses: Complying With Regulatory Policy on a Global Scale | Main | Corruption isn't just 'over there' »
Tuesday
Jul162013

Glaxo VP confesses on China TV

Photo courtesy of CCTV News China state TV has broadcast a confession by GlaxoSmithKline's vice president of China operations.

Liang Hong, 49, admitted bribing doctors when he appeared Monday from his jail cell during the evening newscast on China Central Television (CCTV).

Earlier Monday, the head of China's economic crimes unit at the Public Security Ministry confirmed that four senior executives of the giant U.K.-based drug maker are now under detention on suspicion of paying $489 million in bribes.

The payments went through up to 700 travel agencies to doctors, the China authorities said.

In his confession, Liang said, 'Having spent time reflecting over the past couple of days, I think the money we spent to run our business was too much,' according to a report by the Telegraph.

Liang said the bribes amounted to twenty to thirty percent of the drug prices.

Glaxo, he said, used middlemen who helped stage conferences and overcharged for them. The middlemen then used the extra money to pay the bribes.

In his confession, Liang said he organized ten conferences in three years and grossly overstated attendance at the events to increase billings by the travel agents.

The only middleman named so far is Shanghai Linjiang International Travel Agency. Liang said Glaxo started working with it in 2010.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.