In the news: Sanofi under investigation, Singapore upholds PRC judgment and automaker probe
August 15, 2013 | BY
clpstaff &clp articles &French drug maker Sanofi is being investigated for bribery, the Singapore High Court has upheld a judgment from a Chinese court for $190,000 and the China Automobile Association has begun a probe into the pricing of foreign car makers
French drug maker Sanofi has become the next target in China's crackdown against bribery. Sanofi staff paid bribes totalling Rmb1.7 million ($278000) to 503 doctors at 97 hospitals in Shanghai, Beijing, Hangzhou and Guangzhou in 2007, according to an anonymous whistleblower speaking to the 21st Century Business Herald. Xinhua has cited a health bureau official saying disciplinary authorities and the Beijing municipal health bureau are investigating the French company.
Source: Reuters
It has taken less than a month for the Chinese authorities to investigate another drug maker for bribery. GlaxoSmithKline and now the Sanofi investigation show that the government is hoping to tackle rising drug prices, the authorities are expected to push for stricter price controls. The investigations also show that the new administration is looking to make good on its promise that China shall no longer be plagued by bribery.
More from CLP:
Singapore's High Court has upheld a judgment from a Chinese court in what is believed to be the first decision of its kind. The case saw Chinese company Giant Light sue Singapore-based Aksa Far East in a civil suit in Suzhou in 2010 for supplying two generators that were not new or usable. The court ordered Aksa to pay Giant Light Metal Technology $190,000. Judgments issued by Chinese courts cannot be registered in Singapore under reciprocal agreements, which is why this case had to be tried again before the Singapore High Court.
As China expands its global reach it is foreseeable that similar cases to this one will appear before foreign courts. Giant Light has created a good example for other Chinese companies that are looking to recover lost money. It also shows that Chinese companies are not afraid to sue outside of their home territory.
More from CLP:
China Daily reported this week that the China Automobile Association is beginning an investigation into the pricing of foreign car brands in China. Luo Lei, deputy secretary general of the Association, said the probe is routine and is conducted on annual basis. Reuters also covered the same story, but said the National Development and Reform Commission (NDRC) had asked the association to investigate car makers setting minimum retail prices for dealers in China, an act which violates the PRC Anti-monopoly Law (中华人民共和国反垄断法).
It did not take much time at all for another price fixing case to arise. The Association has said this is part of a routine investigation, but the deputy secretary general admitted that the prices of some foreign vehicles are much higher in China than in other countries. Considering the government's tougher stance on price fixing, it would not be surprising if foreign car makers soon drop their prices. The manufacturers could also face severe fines if found guilty of setting minimum prices.
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now