Chinese authorities have arrested a British contractor as part of an inquiry linked to allegations of bribery and corruption at drugmaker GlaxoSmithKline, Britain's foreign office and a source familiar the matter said on Saturday. Earlier this week Chinese police accused GlaxoSmithKline (GSK) of bribing officials and doctors to boost sales and raise the price of its medicines in China. They said GSK transferred up to 3 billion yuan ($489 million) to 700 travel agencies and consultancies over six years to facilitate the bribes.
"We are aware of the arrest of the British national in Shanghai in China on July 10," a British Foreign Office spokesman said. "We are providing consular assistance to the family." He did not have any further details regarding the nature of the arrest. However, a source familiar with the situation said the arrested man was from an international business risk advisory firm who had worked with the pharmaceuticals sector in China.
A spokesman for GSK, Britain's biggest drugmaker, said the man had never been an employee of GSK but declined to give further details. On Friday, GSK chief executive Andrew Witty sent its head of emerging markets and two other executives to China to address the crisis and help Chinese authorities get to the bottom of allegations it has called "shameful" and which have shaken confidence in GSK's internal procedures.
China has already detained four senior Chinese executives and banned GSK's finance chief in China, Steve Nechelput, from leaving the country. Britain's Times newspaper reported on Saturday that the arrested Briton was part of a swoop in Beijing and Shanghai in the past week which had seen at least 10 corporate intelligence consultants detained or arrested.
The paper, which based its report on unnamed sources, said the round-up extended beyond GSK to other drugmakers working in China, and said Chinese investigators were building their case on information from at least two insiders who had possibly been embedded within GSK's Chinese operations since 2006. Belgian drugmaker UCB said on Thursday its office in Shanghai had been visited by officials from the State Administration for Industry and Commerce (SAIC) seeking information on compliance. The SAIC is one of China's main three anti-trust regulators in charge of market supervision.
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