China Imposes Travel Ban for GSK's Steve Nechelput on Bribery Probe

Chinese authorities have banned GlaxoSmithKline's British finance director from leaving China as part of the country's investigation into alleged bribery by the UK drugmaker's senior executives.

The British pharmaceutical giant said its head of finance, Steve Nechelput, has faced a travel ban since the end of June while the Chinese authorities investigate the company and a range of executives. However, he has not been questioned or detained by China police and is still allowed to work and travel around China.

Nechelput, who has served as GSK's finance chief in China for a year, tried to fly out of China three weeks ago but was informed that he had been banned from leaving the country.

He had sought the advice of British consular officials in China in connection with the ban, the New York Times reported, citing a person involved in the case.

The move comes after Mark Reilly, GSK's China head, left the country shortly after the investigation was revealed on 27 June and has not returned. According to a GSK spokesman, Reilly has long-scheduled meetings in Britain.

He declined to say if or when Reilly would return.

Allegations and Arrests

Over the last few weeks, Chinese authorities have taken four GSK executives into custody, on allegations that the workers were bribing officials and doctors to illegally boost sales and raise the price of the company's medicines in China.

The Ministry of Public Security added that unnamed GSK executives routed 3bn yuan (£324m, €375m, $489m) in bribes to doctors through 700 travel agencies and consultancies over six years.

Chinese police said that a number of executives at GSK had admitted to criminal charges of bribery and tax law violations.

One of the four arrested executives, vice-president and operations manager Liang Hong, confessed on state television on 16 July that he had sourced money through travel agencies for arranged conferences.

GSK Response

GSK called the allegations "shameful" and said it was "deeply concerned and disappointed" by them.

The company added that it is taking immediate action, including terminating business with the identified travel agencies, and reviewing its previous transactions related to the these companies.

"We will cooperate fully with the Chinese authorities in the investigation of these new allegations," GSK said.

"We also fully support the efforts of the Chinese authorities in their reforms of the medical sector and stand ready to work with them to make the necessary changes for the benefit of patients in China."

Earlier, the China Food and Drug Administration (CFDA) revealed that it was planning a six-month campaign to curb sales of illegal medicine. It added that it would target illegal online drug sales and the sale of fake traditional Chinese medicine.

Separately, GSK's chief executive, Sir Andrew Witty, has announced he is resigning from his role on the board of the Department for Business, Innovation and Skills at the end of 2013. However, the company noted that his decision is not related to the current issues in China.