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Pin to quick picksGlaxosmithkline Share News (GSK)

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Britain's Cameron defends GSK's business practices in China

Tue, 03rd Dec 2013 22:00

By Andrew Osborn and Ben Hirschler

SHANGHAI, Dec 3 (Reuters) - British Prime Minister DavidCameron on Tuesday mounted a robust defence of GlaxoSmithKline's business practices in China - where it is beinginvestigated for alleged bribery - calling the firm "verydecent".

Cameron's intervention came a day after he raised GSK'ssituation with China's top leadership in a move one personfamiliar with the conversation said was designed to draw a lineunder the company's woes and ensure it was treated fairly.

Cameron is on a trade promotion trip to China with around100 executives, including GSK Chief Executive Andrew Witty, andis trying to help the firm grapple with the aftermath ofaccusations it funnelled up to 3 billion yuan ($492 million) totravel agencies to facilitate bribes to boost its drug sales.

The claims are the most serious against a multinational inChina in years. Police detained four Chinese GSK executives aswell as Peter Humphrey, a British man running a risk advisorygroup. He is still being held.

Cameron on Tuesday gave reporters what amounted to a strongcharacter reference for GSK, making it clear he was happy tofight its corner.

"All I'll say is that from all my dealings with GSK I knowthat they are a very important, very decent and strong Britishbusiness that is a long-term investor in China and it's abusiness that very much does think about the long-termdevelopment of its products and its businesses," he said.

"I think it is right to raise a case like that. Britain hasa record of properly standing up for British businesses andBritish individuals, raising individual cases in the right wayand about having a proper dialogue with the Chinese authoritiesabout the issues."

The person familiar with the matter said Britain haddetected a softening in China's position, saying it hadencouraged GSK's Witty to join Cameron in China.

Witty himself has declined to comment on the investigationinto alleged illegal payments by GSK to doctors and officials,but told Reuters in Beijing on Monday that the British drugmakerwould have something to say "quite soon".

GSK is Britain's largest pharmaceuticals business and amajor employer of skilled workers, including many scientists.Witty has advised Cameron on business matters in the past andrecently wrote a report on universities for the government.

The scandal has tarnished the image of both GSK and its CEO,who has sworn to get to the bottom of any wrongdoing.

GSK's sales in China dived 61 percent in the third quarterafter hospital staff shunned visits by its sales teams in thewake of the investigation.

Legal and industry sources told Reuters last month thatpolice were likely to charge some of GSK's Chinese executivesbut not the company itself. One person with direct knowledge ofthe situation said the police investigation was likely to beconcluded by around early December.

GSK has said some of its senior Chinese executives appear tohave broken the law. It has also said it has zero tolerance forbribery, calling the allegations in China "shameful".

GSK sold 759 million pounds ($1.2 billion) ofpharmaceuticals and vaccines in China in 2012, up 17 percent on2011, representing about 3.5 percent of its worldwide total.

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