German industrial giant Siemens confirmed that Chinese regulators are “looking into” the business model of its healthcare unit, but denied it was a corruption investigation.
China’s healthcare sector is widely considered to be riddled with graft, partly the result of doctors’ low salaries and an opaque tendering system for drugs.
Media reports said the State Administration for Industry & Commerce (SAIC) and other regulators last year started initial inquiries into the medical device businesses of Siemens, Dutch firm Philips and General Electric of the United States on suspicion of bribing hospitals to gain sales.
Siemens said the SAIC was only examining its “business model” in China.
“The fact is, a branch of (the) Administration of Industry and Commerce in Shanghai is looking into Siemens Healthcare’s Laboratory Diagnostics marketing and business model, which is common worldwide in the industry,” Siemens said in a statement sent to AFP.
“Contrary to the recent media reports, the probe is neither corruption-related nor related to any personal benefits to individuals,” it said in the statement late Monday.
It is the latest reported example of overseas firms being targeted by Chinese authorities, who have launched wide-ranging probes in sectors ranging from autos to baby milk on issues from safety to corruption to price-fixing.
The SAIC also specifically denied a bribery probe into the German firm, saying in a statement it “has not opened a commercial bribery investigation into the Siemens company”.
It did not mention any other companies by name.
In 2014 a Chinese court found British drugmaker GSK had used bribery to boost sales and took kickbacks from travel agencies to organise conferences that never took place, according to previous reports by state media.
GSK was fined 3.0 billion yuan ($480 million) last September after a nearly year-long bribery probe.