Business

GlaxoSmithKline finance head banned from leaving China

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Media captionThe BBC's Martin Patience in Beijing: "Business leaders say foreign companies operating in China have never faced a tougher time"

Chinese authorities looking into alleged bribery by GlaxoSmithKline have banned the UK drugmaker's British head of finance from leaving China.

The travel ban was imposed on Steve Nechelput at the end of June, said a company spokesperson.

On Monday, police in China said GSK had transferred 3bn yuan ($489m; £321m) to travel agencies and consultancies to facilitate bribes to doctors.

GSK has said it is deeply "concerned and disappointed" by the allegations.

The company said Mr Nechelput had not been questioned, arrested or detained by police.

The BBC understands that the British embassy in Beijing is providing consular assistance.

'Abide by law'

Chinese authorities have taken into custody four Chinese executives at GSK in connection with the allegations.

They accuse GSK of using travel agencies to bribe government officials, doctors and hospitals in order to boost sales and prices of their drugs. The investigation began at the end of June, police said.

One of the four executives, vice-president and operations manager Liang Hong, appeared on state television on 16 July and said he had funnelled money through travel agencies for arranged conferences, some of which were never held.

Martin Patience, BBC's correspondent in Beijing, said the reputation of the drugs giant has taken a huge hit in China where it has been widely condemned in the state media

An article on the China Daily website said: "This case should serve as a warning to other Chinese companies and their transnational counterparts that they must abide by the law when promoting their products".

GSK's general manager for China, Mark Reilly, is said to have left the country for Britain last month.

On Monday, Gao Feng, head of the economic crimes investigation unit, said similar transfers had been made by other pharmaceutical multinationals. He did not name any other foreign companies.

GSK has said it is taking immediate action, including terminating links with the travel agencies that the Chinese authorities have identified, and conducting a review of its transactions related to the travel agencies.

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