One of the highest profile cases in a recent series of probes against multinationals in China has reached an emphatic but reasonably just conclusion, with word that Beijing has fined British drugmaker GlaxoSmithKline (London: GSK) nearly half a billion dollars and handed several of its top local executives suspended jail sentences. I was never a big fan of this investigation, which saw GSK pursued for bribing doctors and other medical professionals to buy its drugs. That’s not because I think GSK was innocent in this case, but rather because I think the company was unfairly singled out for punishment for corrupt practices that are widespread in China’s business culture. Read Full Post…
Another US-traded Chinese online game firm could be headed for de-listing, after shares of China Mobile Games (Nasdaq: CMGE) tanked on reports of a major bribery scandal. China Mobile Games’ woes are just the latest in a growing list for US-traded online game makers, which have earned the official title of “no respect” from Wall Street investors. Two of the sector’s biggest players, Shanda Games (Nasdaq: GAME) and Giant Interactive (NYSE: GA), are in the process of privatizing, and I wouldn’t be surprised to see a buyout offer emerge for China Mobile Games following this new scandal. Read Full Post…
Shenzhen Airlines officials sentenced for fund misuse
China’s recent wave of anti-corruption probes at big state-owned firms is moving in another new direction, with word that 6 officials at regional carrier Shenzhen Airlines have been found guilty and sentenced for misappropriating funds. This particular case represents a new wrinkle in the recent wave of probes because it involves corruption through the use of business shenanigans, rather than direct bribes and embezzlement that have been the focus of most investigations so far. At the same time, Chinese graft investigators are getting some moral support from abroad, with word that Britain’s anti-corruption watchdog has received more funds for its own investigation of Rolls-Royce (London: RR) related to the luxury car maker’s activities in China and Indonesia. Read Full Post…
The accelerating anti-graft campaign in China could be entering a new phase, with word that Britain’s anti-corruption watchdog has formally launched an investigation into jet engine maker Rolls-Royce. The move marks the latest investigation of a major foreign firm related to its China operations, as Beijing itself engages in an increasingly aggressive campaign to root out corruption at state-owned enterprises. While this latest investigation is certainly a welcome development in the drive to clean up China’s business environment, the acceleration of the broader campaign could also create major disruptions in the country’s business world over the short-term. Read Full Post…
China’s ongoing anti-graft sweep continues to gain momentum as we approach the end of the year, with major new developments in the headlines from British drugmaker GlaxoSmithKline (GSK) (London: GSK) and domestic energy giant PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR). In the former case, GSK is taking the revolutionary step of saying it will no longer pay doctors anywhere in the world to promote its products. In the latter, media are reporting that another top PetroChina official has been detained and resigned as he assists with ongoing investigations of corruption at the state-run giant. Read Full Post…
I don’t know if I’m the only one who noticed this, but the flurry of attacks on foreign companies that began quite suddenly during the summer has ended just as quickly, replaced by what looks like a longer-term series of investigations against high-level officials at major state-owned firms. This second wave of attacks is obviously much more politically sensitive since it targets well-connected local Chinese officials, many of them high-ranking executives at some of the country’s leading state-run firms. Sensing that this anti-foreign campaign has now officially passed, visiting UK Prime Minister David Cameron has become a vocal supporter of GlaxoSmithKline (GSK) (London: GSK), the British drugmaker that was at the center of one of the biggest attacks against a multinational during the summertime campaign. Read Full Post…
