NEWSpublisher 2007 :: AngloChinese Investments
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»10/04/2007 [Industry news]
Former SFDA Head accused of taking 5Million Yuan bribe

Zheng Xiaoyu, former director of the State Food and Drug Administration (SFDA), who was expelled from the Communist Party of China (CPC) last month, has been accused of taking bribes of more than 5 million yuan (about 650,000 U.S. dollars).


Zheng Xiaoyu, former director of the State Food and Drug Administration (SFDA), who was expelled from the Communist Party of China (CPC) last month, has been accused of taking bribes of more than 5 million yuan (about 650,000 U.S. dollars).

Zheng's case, previously investigated by the CPC Central Commission for Discipline Inspection, has been transferred to the Supreme People's Procuratorate (SPP). Zheng is locked up awaiting trial, according to a report of the 21st Century Business Herald.

The report said Zheng's relatives are also being investigated for assets worth of millions of yuan which they could not account for.

All of the bribes, including cash and gifts, came from pharmaceutical companies, said the report.

The report fingered a pharmaceutical company in south China's Hainan Province, the Hainan Kongliyuan Group, which gave Zheng bribes and paintings.

In return, the company acquired 277 approvals of medicines from the SFDA, including more than 100 approvals in 2005. Most of the medicines were antibiotics which could bring high profits for the company.

The heads of the company have also been detained for investigation, said the report.

Zheng first came under investigation by the CPC Central Commission for Discipline Inspection in December last year.

Well-informed sources said that clues to Zheng's case were discovered during an investigation of his subordinates.

Hao Heping, one of Zheng's former secretaries, was sentenced to 15 years in prison for bribery in November last year. Cao Wenzhuang, another former secretary of Zheng, came under investigation in January of last year.

Zheng was appointed director of the SFDA when it was created in 1998.

In 2002, China adopted national standards for approving medicines. All new medicines had to be approved by the SFDA before they could be put on the market.

Zheng promoted a certification system called Good Manufacturing Practice (GMP), which was brought into disrepute by a series of health scares and corruption scandals.

Zheng Shangjin, former head of the Drug Administration in east China's Zhejiang Province, has been linked to Zheng Xiaoyu's case, according to the report.

Hainan Kongliyuan Group gave Zheng Shangjin a car worth 580,000 yuan (about 75,000 U.S. dollars) in 2005 in return for establishing contacts with high-ranking officials in Beijing.

Zhou Hang, Zheng Shangjin's predecessor, also had close relations with Zheng Xiaoyu. Zhou was sentenced to death with a two-year reprieve by local court in 2002 for taking bribes.

The court found that Zhou took bribes totaling 2.67 million yuan (322,000 U.S. dollars) and 170,700 U.S. dollars between 1988 and 2001.

More than one sixth of the pharmaceutical companies which obtained GMP certificates in Zhejiang Province had given bribes to Zhou, said the report.

A retired SFDA official said Zhou persuaded Zhejiang's pharmaceutical companies to "pay tribute" to Zheng Xiaoyu. "In the SFDA's first year, one fifth of the country's approved new drugs were from companies in Zhejiang."

Gao Chun, once director of the R&D department of a large pharmaceutical company, said the so-called R&D departments of many pharmaceutical companies actually dealt with public relations.

After the Hainan Kongliyuan Group's involvement in the scandal was exposed, He Xiaohua, assistant to the general manager of the company, said that although the company had 300 employees in its R &D department, none of the 100-odd drugs produced by the company each year had in fact been developed in-house.


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