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Pin to quick picksGlaxosmithkline Share News (GSK)

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UPDATE 1-Cameron raises GSK's problems as CEO joins him on China visit

Mon, 02nd Dec 2013 17:02

* PM stresses need for stable business environment -source

* Witty on first visit to China since bribery scandal

* CEO expects update on graft investigation "quite soon"

* GSK spokesman says trade trip shows commitment to China

By Andrew Osborn and Ben Hirschler

BEIJING/LONDON, Dec 2 (Reuters) - British Prime MinisterDavid Cameron raised GlaxoSmithKline's problems in China- where it is being investigated for alleged bribery - withpolitical leaders on Monday as the drugmaker emphasised itscommitment to doing business there.

Cameron, who is visiting China with executives including GSKchief executive Andrew Witty, discussed the company's dilemmawith China's leaders and stressed the need for a stable,predictable business environment, a person familiar with thematter said.

Witty is part of a 100-strong trade delegation travellingwith Cameron. It is Witty's first visit to China since thecorruption scandal blew up in July and a GSK spokesman said hispresence underscored a desire to continue operating there.

Witty himself declined to comment on the investigation intoalleged illegal payments by GSK to doctors and officials, but hetold Reuters in Beijing that the British drugmaker would havesomething 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.

Commenting on his visit, GSK spokesman Simon Steel in Londonsaid: "It's an important opportunity to show our continuedcommitment to China and to supplying our medicines to thecountry."

Chinese police have accused GSK of funnelling up to 3billion yuan ($492 million) to travel agencies to facilitatebribes to boost its drug sales. The accusations are the mostserious against a multinational in China in years.

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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