Shanghai travel agent's revenue surge led to arrests in GSK bribery case

The "abnormal" business activities of an obscure Shanghai travel agency provided the first clue to a bribery scheme that has resulted in the detention of several senior executives of GlaxoSmithKline, authorities said yesterday.

The company, Shanghai Linjiang International Travel Agency, had seen a sudden explosion in revenue - nearly all of it from pharmaceutical companies like the British drug giant.

Police investigations discovered that agency was one of numerous firms being used by GSK to funnel nearly three billion yuan (HK$3.8 billion) in kickbacks to doctors, hospitals and other groups, who prescribed their drugs, authorities said.

In turn, GSK managers also took kickbacks from the travel agencies, including hiring women to provide "sexual bribery" to managers at the drug maker, authorities said.

"GSK has been transferring money to more than 700 travel agencies and consulting firms since 2007," said Gao Feng , head of economic crime investigations for the Ministry of Public Security. "We have plenty of reasons to suspect that these money operating activities were illegal.

"Several travel agencies … used not only money to bribe GSK executives, but also pretty women to bribe them," Gao said.

Xinhua said that at least four executives from GSK's Chinese subsidiary had been detained, including vice-president and business operations general manager, Liang Hong ; vice-president and human resources supervisor, Zhang Guowei ; legal affairs supervisor, Zhao Hongyan ; and business development general manager Huang Hong .