GlaxoSmithKline (NYSE: GSK) has sent three executives to China in response to a government probe of suspected economic crimes, according to person with knowledge of the matter.

Abbas Hussain, the London-based company’s president of Europe, Japan, emerging markets and Asia Pacific, was dispatched to China by Chief Executive Officer Andrew Witty and is leading Glaxo’s response to the probe, according to the person, who wasn’t authorized to speak on the record and asked not to be named.

Glaxo’s global head of internal audit and its deputy chief counsel for China are accompanying Hussain, the person said.

Glaxo has had four of its senior executives detained amid an investigation involving 3 billion yuan ($489 million) of spurious travel and meeting expenses, and trade in sexual favors, China’s Public Security Ministry said July 15. Mark Reilly, who has led Glaxo’s business in China since 2009, left the country on June 27 after his colleagues were detained. Glaxo’s finance chief in China, Steve Nechelput, has been unable to leave the country since the end of June.

Reilly returned to the U.K. on a routine, planned business trip and has been working from Glaxo’s headquarters on the response to the probe, a person with knowledge of the matter said July 15. The person, who asked not to be identified because he wasn’t authorized to speak on the subject, declined to say when or whether Reilly will return to China.

Travel Agency

State broadcaster China Central Television aired a prime- time segment on July 16 detailing how executives at the U.K.’s largest drugmaker used a travel agency to funnel bribes to government officials.

The CCTV report featured Liang Hong, operations manager for Glaxo China, explaining how executives passed bribes to drug regulators, pricing officials at the National Development and Reform Commission and hospital officials. Liang is among the four Glaxo executives in police custody, CCTV reported.

The allegations are “shameful” and would be a breach of internal systems and values, Glaxo said in a statement.

A Shanghai travel agency was temporarily closed as Chinese authorities examine its role as part of a probe into suspected economic crimes at London-based Glaxo’s business there, the Xinhua news agency reported.

Shanghai Linjiang International Travel Agency shut to enable the investigation of its involvement in the Glaxo case, Xinhua said, citing the Shanghai Municipal Tourism Administration.

China’s Crackdown

Efforts to clean up the nation’s $350 billion health-care industry have gained prominence since police said last month they were investigating Glaxo for suspected economic crimes. On July 17, the China Food and Drug Administration said it will “severely crack down” on fake medications, forged documents and bribery.

Recent investigations have so far implicated Glaxo, though other foreign companies may also be involved, Gao Feng, head of the economic crimes investigations unit of China’s Public Security Ministry, told reporters at a July 15 briefing.

“This could be the government killing the chicken to scare the monkeys, using the GSK case to send a signal to pharmaceutical companies to say ‘maybe it’s time to stop this type of practices,’” said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations in New York and author of the book, Governing Health in Contemporary China.

Four Drugmakers

At least four multinational drugmakers are facing probes by local anti-corruption units in China, according to Wendy Wysong, the head of anti-corruption practice in the Asia-Pacific region at law firm Clifford Chance. No other foreign drug company apart from Glaxo has been named so far by Chinese authorities in connection with the investigation.

UCB SA’s Chinese operations were visited by local authorities, France Nivelle, a UCB spokeswoman, said yesterday in an interview. All drugmakers are receiving visits, and the Brussels-based company has “nothing to report,” Nivelle said. “It’s business as usual,” Nivelle said.

UCB fell 1.6 percent to 42.45 euros at 1:26 p.m. in Brussels.

Novartis AG, Europe’s biggest drugmaker by sales, and Germany’s Bayer AG said they haven’t been approached in China by the authorities in connection with any misconduct. Merck & Co., the second-biggest U.S. drugmaker, said it hasn’t been contacted by the Ministry of Public Security. Roche Holding AG said it’s not aware of any anti-corruption probes in China against the Basel, Switzerland-based company.

No Contact

Novo Nordisk A/S hasn’t been contacted by Chinese authorities and “is, to our knowledge, not included in the investigation,” a spokesman for the Bagsvaerd, Denmark-based company said today. Sanofi, France’s biggest drugmaker, declined to comment on whether it’s had any contact with China’s government in relation to bribery probes, or whether the Glaxo investigation could have any implications for its business in China.

AstraZeneca Plc, the biggest U.K. drugmaker after Glaxo, said in its 2012 annual report that it is investigating indications of inappropriate conduct in countries that include China. The company has no update yet, Esra Erkal-Paler, a spokeswoman, said in an e-mail.

GSK operates its North American headquarters in RTP.

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