Chinese legal newspaper accuses Glaxo China of tax evasion

According to a government-run legal newspaper in China, the domestic unit of GlaxoSmithKline Plc failed pay over 100 million yuan ($16 million) in import duties and taxes in relation to its HIV treatment. China's Legal Daily newspaper reported on its Weibo microblog on May 16 that the company had evaded the said taxes from the years 2005 to 2008.

Bloomberg said that the former China chief of the pharmaceutical company, British national Mark Reilly, was indicted on May 14 as local police turned over a case to prosecutors, who accused him of ordering bribes to physicians. Reilly reportedly left the country following the detention of some Glaxo employees in June last year. The following month, the drugmaker stated that Reilly will be aiding the police in the bribery investigation upon his return to the mainland.

Aside from the tax evasion allegations, the Legal Daily also accused the Glaxo unit of price manipulation regarding its locally-made and imported drugs. The newspaper said the Glaxo unit supposedly provided falsified costs to the mainland's regulators.

The Legal Daily is an official newspaper of the China Communist Party's Commission for Political and Legal Affairs. According to its official website, the paper is the main mouthpiece in the politics and law fields of the Party.

Calls to Glaxo's Singapore-based spokesman Garry Daniels were not answered nor the emails sent to its Singapore and London offices.

The news agency said that Glaxo has also launched a probe over the allegations that its employees had bribed physicians in Lebanon and Jordan in its April 16 statement, after claims of similar allegations in Iraq and Poland were made public. Just last year, the pharmaceutical giant said that it had fired 48 employees for violations in sales and marketing practices. GSK also said in the same statement that it had disciplined another 113 employee for similar violations.

Tags

GlaxoSmithKline Plc, Legal Daily, China Communist Party

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