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Q: Why is China investigating GSK?
What defines corruption in a economy where "hong bao" is the main driving force?
So is this a cautionary tale or a one-off? Most businesses in china have to pay the official fee to the relevant authorities and then additional red packets or dinner outings/holidays etc to secure the good relationships in the right departments. I thought this is just the way it goes in China or standard operating procedure but with the recent crack down on corruption it seems there maybe a free for all on any under the table exchanges. Set the personal politics and clashing business cultures problems of GSK against a pharmaceuticals sector with rapid growth and a healthcare industry where bribery is systemic and you have a recipe for disaster. I feel really sorry for the CEO.
9 years 41 weeks ago in Business & Jobs - China
This is a story from a year ago.
GSK are big boys, they had the means of auditing the country they were dealing with, and knowing it would eventually backfire for political reasons. They lost the the "let's bring a foreign multinational company down now which is the weakest" game.
I'm starting to suspect we're going to get some CFTU stuff next, will you prove me wrong?
expatlife26:
We should hope we do! Those are the only guys saying the real truth!
yes the real victim here is the CEO, maybe we can hold a fundraiser for him.
It is very simple really. The CCP decided it wanted one of it's companies to have a larger share of the market. With the cost of living rising it is more expensive to keep mistresses now you see.
Is it merely coincidence that this thing came up only after Beijing brought in the new laws regarding money in China stays in China if there is some form of litigation (or even accusation) against someone or company??
It's simple - it's a pharmaceutical company. China produces lots of knock-off pharmaceuticals. GSK had to be brought down, and various people in or connected to the CCP wanted to get more money. That's all there is to it!
I have a different opinion as to what is going on. About 20 months ago the UK health authorities made a blanket statement that they would not accept research data generated in China as China is not an OECD member country and there is no MAD (mutual acceptance of data) treaty between the two countries. This is a strong arm move by the UK to try and force China into becoming an OECD member country. China is resisting this as it would force greater international regulations on many industries within China, not just medicine.
GSK being the largest UK pharmaceutical company was then put under investigation and found to be bribing hospital officials and doctors. I believe this was retaliation for the UK's position tit for tat.
However it puts GSK in a serious bind as it is a publicly traded company on the NYSE, thereby governed by US law. Specifically the Foreign Corrupt Practices Act of 1977 which it is now being investigated by the US Dept of Justice.
http://www.scmp.com/business/companies/article/1295403/gsk-may-pay-high-...
This is on top of a 3 billion dollar fine paid by GSK to the US in 2011 for pushing drugs for off label use.
The sad fact is most large corporations would be diagnosed as psychopaths if they were considered people and not legal institutions. Below are the traits of a psychopath, think of a major corporation and see how many fit.
1) callous disregard for the feelings of other people,
2) the incapacity to maintain human relationships,
3) reckless disregard for the safety of others,
4) aggressiveness,
5) deceitfulness (repeated lying and conning others for profit)
6) incapacity to experience guilt, and
7) the failure to conform to social norms and respect for the law.
Other common traits include these:
No conscience
Lack of remorse for evils done to others
Indifferent to the suffering of its victims
Rationalizes (makes excuses for) having hurt, mistreated or stolen from others
Willingness to exploit, seduce or manipulate others
No sign of delusional or irrational thinking.
Cunning, clever
Commonly above average intelligence
Always looking for ways to make money or achieve fame or notoriety
Willing to cause or contribute to the financial ruin of others
Untrustworthy
Cannot be trusted to adhere to conventional standards of morality.
Personally I think they all deserve whatever punishment they get!
Burak43:
Seems ridiculous to superimpose individual human traits on an organization consisting of thousands of individuals.
Shining_brow:
You know most of those traits also describes a certain government hereabouts....
KimOnach:
Thousands of individuals are not expected to self-determine in a company, just to do a job. Lower levels are just expected to obey. To get promoted, the higher the level, the more indoctrination is expected. Indoctrination eventually hits a limit, and to get access to the highest ranks truly needs to reveal the traits of a psychopath.
Hearing Cisco representatives making speeches really give me the creeps lately.
CharlieB:
The companies are responsible for their employees actions. I as a Senior Director in an international research lab am held accountable for each one of my >400 employees. In turn I hold them accountable for their actions. I manage this by having a no tolerance policy for lapses in integrity.
You can make honest mistakes without fear of punishment, but you will be retrained and it will be documented. If you lie, falsify data, or willfully disregarding procedures and regulations your career will be short lived in my organization.
GSK are not exactly angels (ditto Charlie's post), they are really big and visible, and it's hammer time. China Law Blog have, I think, a good comment about all that
http://www.chinalawblog.com/2014/06/how-to-avoid-china-corruption-charges.html
It's all down to the fact they they failed to grease the right palms.
ScotsAlan:
I thought it was the opposite, allegedly.
Bit of a crackdown on such things at the moment.
They are accused of breaking the law. So they are being investigated.
