China FlagGlaxoSmithKline’s China operations – under investigation by state officials who accuse the UK pharmaceutical giant of breaking Chinese laws – could spell trouble for other foreign businesses operating there…

GSK’s China arm may have to pay fines and give up profits totaling billions of renminbi if state allegations of mass graft by its executives are proven.

Exacerbating the matter, a Chinese state-run newspaper has also accused the British drug maker of evading around $16m in tax in China, while fresh accusations have surfaced that a British GlaxoSmithKline executive bribed hospital officials to use its medical products in Beijing and Shanghai.

The initial accusation that mass fraud was perpetrated by rogue Chinese executives at GSK have quickly moved into an altogether wider territory of corporate liability, with far wider ramifications for Western businesses operating in China.

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