Wednesday, September 11, 2013

GlaxoChinaGate contd. - GSK affirms China plans, despite scandal - BUSINESS -

British drug maker GlaxoSmithKline (GSK) said it remains "committed to China for the long term" in a statement e-mailed to the Global Times Tuesday, despite recent reports that the company is considering pulling out of China. 

GSK is considering leaving China as it is facing a penalty of 20 billion yuan ($3.27 billion) for bribing doctors, China National Radio reported Monday, citing an unnamed company executive. 

With the continuing development of China, the need for healthcare and medicine will increase so it is not likely that GSK will leave a market with such great potential, said Lu Jinyong, director of the China Research Center for Foreign Direct Investment at the Beijing-based University of International Business and Economics. 

Lu also said it would be a dishonorable move for GSK to retreat from China amid such a widely reported bribery scandal. 

China welcomes foreign enterprises that obey local laws and regulations, He Manqing, director of the Institute of Foreign Investment under the Chinese Academy of International Trade and Economic Cooperation, told the Global Times Tuesday.

GSK should learn from its mistakes, Lu said. According to UK laws, the country's firms are forbidden from offering bribes when conducting business overseas, and GSK should have internal control to avoid such practices. But the scandal shows that GSK has not effectively implemented this in its branch in China, Lu noted. 

Lu and He both said it would be difficult to predict what kind of fine the company will face before the investigation is completed. 

The Department of Justice in the US is also investigating GSK over whether it violated US laws against overseas corruption, as the company is listed on the New York Stock Exchange, Reuters reported Friday.

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