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By Adam Jourdan
SHANGHAI, Sept 12 (Reuters) - Chinese drug company SinoBiopharmaceutical Ltd has set up a team to investigateallegations broadcast on state television that itsmajority-owned subsidiary had paid for illegal overseas tripsfor doctors, it said on Thursday.
Regional sales teams at Chia Tai Tianqing PharmaceuticalGroup Co Ltd, 60 percent owned by Sino Biopharmaceutical, hadpaid for doctors to travel to Thailand and Taiwan, which couldbe considered illegal bribes, China Central Television (CCTV)reported late on Wednesday.
Hong Kong-listed Sino Biopharmaceutical is the secondChinese firm to come under the spotlight this week, underliningthat domestic companies are not immune to a recently launcheddrive against corruption in the sector.
Privately held Gan & Lee Pharmaceuticals said separately onWednesday it was investigating allegations it spent about 800million yuan ($130.75 million) to bribe doctors to promote thefirm's drugs over five years.
Goldman Sachs Group Inc holds a 4.07 percent stake inGan & Lee through a Beijing-based investment fund, a spokeswoman for the U.S. investment bank said on Thursday.
Cao Xiwen, the chairman's secretary at SinoBiopharmaceutical, told Reuters by telephone the company hadsent a team to investigate the allegations, but there was noconclusion yet. He said the problem was confined to theJiangsu-based subsidiary.
"We are sending a team down the look into the situation ...When they clarify the problem locally, we will have a betteridea at head office in Beijing," he said.
CCTV cited a company insider and showed undercover footageindicating sales staff had paid about 6,500 yuan ($1,100) perdoctor on certain overseas trips.
Sino Biopharmaceutical had a turnover of HK$4,751.81 million($612.75 million) in the six months to June this year, up about35 percent against the same period in 2012, according to afiling with the Hong Kong stock exchange.
Sino Biopharmaceutical shares plunged nearly 25 percent to ahalf-year low before trading was suspended around midday withthe shares down more than 16 percent. Deutsche Bank said in anote the firm's management had lowered growth estimates for thesecond half of the year because of the CCTV report.
LOW SALARIES, WHISTLEBLOWERS
A series of recent media exposes has coincided with several investigations into the pharmaceutical sector, spanning allegedcorruption to how drugs are priced.
The most high-profile investigation into corruption in thepharmaceutical sector in China involves British drugmakerGlaxoSmithKline.
Police have detained four Chinese executives from GSK overallegations it funneled up to 3 billion yuan to travel agenciesto facilitate bribes to doctors to boost the sale of itsmedicines. GSK has said some of its senior Chinese executivesappear to have broken the law.
Corruption in China's pharmaceutical industry is widespread,fueled in part by low base salaries for doctors at the country's13,500 public hospitals.
A number of whistleblowers have made a beeline for China's21st Century Business Herald newspaper over the last months.
Last month, U.S. drugmaker Eli Lilly and Co said itwas "deeply concerned" after the newspaper quoted anunidentified whistleblower saying it spent more than 30 millionyuan to bribe doctors in China.
The paper also quoted whistleblowers in August as sayingSwiss drugmaker Novartis AG and French company SanofiSA had paid bribes to doctors to boost drug sales.
