GSK chief Andrew Witty set to admit China 'scam’

The chief executive of GlaxoSmithKline, Sir Andrew Witty, is to admit major failings in the pharmaceutical giant’s Chinese operations following allegations by the country’s security ministry that the company took kickbacks and paid bribes to government officials.

Sir Andrew is set to use the company’s second quarter results next week to reveal that GSK’s own investigation into allegations of a “huge economic scam” has uncovered evidence that appears to show senior executives in the country were involved in an orchestrated attempt to falsify invoices, pay sweeteners to third parties and siphon off payments for their own use.

Craig King: Andrew Witty needs to be very careful travelling to China because he may very well find he winds up in prison, on death row very quickly. The rules there are very different from what he is used to.

CriticalThunking:  lol Andrew Witty won't step foot in China.

RogertheSaint: Any company doing business in China faces the challenge of the level playing field, or rather the lack of one. Chinese companies think nothing of paying money to their customers, and this is not necessarily regarded as corruption. To counter this western companies find ways of paying benefits other than cash. This of course depends on your definition of corruption. Does a weekend in London with tickets and all expenses paid for a trip to Wembley or Wimbledon count as corruption? Does extensive corporate entertaining? What if the same amount of money was spent to provide you with double glazing? If it's cash it would be, even if the expense is exactly the same. There is no such distinction in China. Companies provide what the customer (the buyer) wants. But you join in this practice at your peril.

CriticalThunking: It doesn't depend on my definition or your definition of corruption. It depends on the bloke with real politik aka the Big Stick

seethru: We are not talking here of a weekend in London or free tickets to Wimbledon, are we?   We are talking about hundreds of millions of pounds.   China has executed people found guilty of theft, fraud, embezzlement, bribery and corruption for a lot less money.

RogertheSaint: seethr, The amount paid in kickbacks is unclear but is believed to be about 10% of the business. The number of "beneficiaries" runs into tens of thousand. That's not much for each person. There will undoubtedly be a few folks who got more. The real failure in all this is the fact that the financial compliance and auditors didn't pick this up. I live in Shanghai. It was public knowledge. With so many people involved it was hardly a secret. GSK was a prime target in the current clean up campaign - you could see this a mile off. The shock and amazement, and subsequent shame, is just playing to the gallery. 

johnnyjustiss: This is only GSK embracing local business practice and engaging in the culture of a 5000 year old civilisation. When in Rome eh ! When in Rome !

Ice_Berg: Ernst & Young don't make me laugh, didn't they look into F1 and gave them a clean bill of health. Look at the news today with Ecclestone indicted in a German court.

foxenburg: The buck stops where, Mr Witty?

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seethru: Lots of people doing business in China without any problems.   What is your point?

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bogwart: I would have said that the behaviour you describe fits more closely a large corrupt and vicious country to the west of us, and I share your hope that it implodes soon.  Unlike China, everything is in  place for such an event, with major cities now lining up to file for bankruptcy protection. Your comment is, like most others you make, ill-considered ignorant and juvenile.

Toby Esterházy: Well, unlike you, Sir, the other chap does have a pad in Knightsbridge. He can jolly well afford to be juvenile, son! Definitely not a ten-a-penny unemployed Chinese graduate maniac depressive with delusions of grandeur! Why do the ones who spout trendy left-wing nonsense often themselves foreigners or immigrants?

bogwart: What ARE you on about?  I have no intention of defending myself against your idiotic ramblings - why should I bother when you seem to have such a rich fantasy world embedded in what passes for a brain? But allow me to mention the following facts:  I am not Zhanglan, not do I have any other identities.  Unlike you, who I suspect is using at least two on this topic. I am most definitely not your son. I am not "a ten-a-penny bilingual-but-unemployed Chinese graduate suffering from maniac depression with delusions of grandeur!" I am not a left winger, though I see nothing to be ashamed of in such a description. I am neither a foreigner nor an immigrant, having been born here 67 years ago.  It's amusing that you choose to use an avatar like 'Karla's Man'  and to pretend this is OK, while at the same time inventing all kinds of rubbish to justify your twisted little fantasies in regard to my avatar. I note that you are following 90 people on  Disqus.  Feeling lonely?  Or are you just a wannabe cyber-stalker?  Either way,  transfer your grubby little attentions elsewhere.

Toby Esterházy: No, mate, you are just a Walter Mitty! You are as British as those Russian newsreaders on the "Russia Today" television (disinformation) channel with seemingly flawless English. If anything, your English is a little too immaculate. Speaking like a machine, are you, now? You are not a Lefty or a Bolshevik, yet spend as much time on the Indy? You are one confused puppy, my son! You should spend some time east of Bow (not Whitechapel, as one other annoying idiot, but with a few more cards missing, and formerly on these boards until his banishment, often claimed). That would teach you the errors of your Leftie ways!

bogwart: Get over yourself, will you?  Now you're jealous that I can use my language and you can't, so you go on with your cretinous nonsense. I am not, I repeat, your son.  Or your mate for that matter.  I don't know why you have latched onto me, but in truth I could care less.  You are an irritant, in the same way as an unnoticed dog turd is an irritant, and you have about the same effect.  Scrape it off and move away. If you must practice your self-abuse in public, so be it.  But I have blocked you in my email client so I don't have to see your tosh any more.  Go away.

Alex Wijaya: The GSK CEO was shocked, now that is news. I still can't stop laughing. Those poor local executives will end up as the sacrificial lambs. 

Bunter999: you think the locals are the victims and the Board of GSK set up fraudulent systems on the other side of the world without anyone knowing…idiot

Alex Wijaya: The GSK CEO was shocked, now that is news. I still can't stop laughing. Those poor local executives will end up as the sacrificial lambs. 

sparkflash:  Why do I suspect that GSK's major failing was that they didn't bribe quite enough, or the right people?  The shrillness of China's protestations and accusations before the investigation was complete, suggests someone, high up, didn't get the money they thought should be coming to them.

oldwease: You mean the big drug companies which routinely falsify data, only publish positive 'research' which they buy and pay for whilst blacklisting doctors and researchers who raise flags, also engage in bribery?  I don't believe it!

CriticalThunking:  But wait in an amazing coincidence James Murdoch was a non executive director. I've booked flights for both of them to Beijing… my shout. First Class of course.

ImDavesSlave: Isn't greasing palms the way of big business in China, as it certainly is in Britain.

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