in the last few minutes we will have atatement from glaxo smithkline in terms of the allegations, who said they are deeply disappointed by these allegations of fraudulent behavior and that the company has a zero tolerance for behavior of this nature and that they share the desire of the chinese authority to root out corruption. i go on, it says in this statement that these allegations are shameful and that they regret what has occurred. that statement just came out in the last few minutes. the pharmaceutical company is stressing that they will work with the chinese authorities over the serious allegations. >> how much attention is this case getting in china? fairly high profile? >> i think it is in many ways. the most high-profile case since executivesel -- tinto were jailed for taking bribes. authorities in the state media have been saying they need to clean up the drug industry in china. adding price controls on pharmaceuticals. the president has made tackling corruption a symbol of his government since he took up part later this year -- earlier this year. >> think you're a much, ar

four glaxo executives have been detained.inance director, a foreign national, ordered not to skip town, part of the crackdown on the first foreign firm to be ensnared in beijing's anti-corruption drive. it is like catching a big fish, this lawyer says, it's a warning. one industry in need of a cleanup, health care. walk into a hospital, and dysfunction is evident right from the start. this is where people buy tickets to see the doctor. they normally cost a dollar, but scalpers will sell them to you for 85. the salary of our doctors is about $1,000 a month, he says, commercial bribery in china's drug sector is very common. it is an open secret. big pharma has faced trouble breaking into this market, complaining the local drugmakers are entrenched in the hospital system. now glaxo scandal is feeding the perception among international firms china is even less welcoming. >> what may be happening is that they're going after foreign companies right now to soften up the political ground because they're going to be going after state

executives at british drug maker glaxo smith kline have confessed to a massive corruption scandal. executives admitted to bribing doctors, hospitals and government officials in order to boost drug sales in china. a spokesperson for the company says it is cooperating with the

not just glaxo. not just eli lilly, not just pfizer.issa: but, fred, how should that factor the way the sec follows up? to a certain extent i have sympathy for companies trying to operate in foreign countries where bribes are the norm. if they don't provide bribes, they can't get the business r operate there. for the sc to go after them in other countries, i don't know, should that factor in somehow that they can't do business without bribes? >> interesting, melissa, in the foreign corrupt practices at there is carveout for what they call greasing. if you're paying money to public officials to do the job they're supposed to do, that is not a violation and the sec won't even look at that but what we're talking about here quite frankly is repugnant. we're talking about patients who go to doctors and when a patient goes to the doctor, i don't care if they're in t u.s. or china or anywhere, on neptune they have the right to make sure their doctor is prescribing a medication for tm because they believe it is the best, most iaea tentative med

in other words, glaxo is going to bring down prices.ut then the government had said that glaxo's executives had violated china's laws, damaged markets by engaging in bribery to raise drug prices, expand sales and reap what this government considers inappropriate profits. now, what was really interesting about the language here is that it really strikes at the heart of a major issue between big pharma and the chinese government. and that is price. the government here has been pry trying to bring prices down of medical equipment as well as foreign-made drugs. but big pharma for years has been trying to keep prices where they are or at least even higher because china's consumers really view the drugs that are made by big pharma as safer and more reliable. all of this is raising questions if what we're seeing today is part of a larger populous game on the part of the chinese government to get international companies to drop their prices. guys? >> okay. eunice, appreciate it. we're going to keep it tight today and get to michael thompson, al

last year british drug maker glaxo smith kline pleaded guilty for unlawfully profecting prescription drugs among other offenses. it was the largest healthcare fraud settlement in history. that was 1/3rd in settlements negotiated by the government in 2012, triple the recoveries in 2011 and 50% more than 2006. this year bp was sentenced in january to pay $4 billion, a record for an environmental crime stemming from the 2010 deep water horizon spill in the gulf and a company agreed to pay a fine bringing the rbs and rbs japan totals in that case alone to $612 million. in may, walmart pleaded guilty to violating the clean water act and was sentenced to pay a fine of more than $81 million. fines for anti trust and price fixing allegations like the one jp morgan chase faces have grown the most in resent years topping $5 billion in 2012 and still says university of baltimore law professor, companies are willing to take the risk. land and john conner from perdue said we only catch about 25% of the market manipulators and he said at that rate, fines need to be five times what they have been a

every day on chinese tv, this week there was an interview with an executive of british drug giant glaxo smith kline shocking the international business community in china. >> what is going on with gsk is unprecedented. i've never seen the government go so strongly and loudly after one company. making such a big deal out of it in a criminal way. >> reporter: the alleged crime bribery of doctors, officials and hospitals in hundreds of millions of dollars. four glaxco executives have been demained and one ordered not to skip town, part of the crack down on the first foreign form to be insnared in the anti corporation drive. it's like catching a big fish this lauwyer says. it's a warning. one industry in need of a cleanup. healthcare, walk into a hospital and dysfunction is evident from the start. >> this is where people buy tickets to see a doctor. they normally cost a dollar but staffers will sell them for $85. the salary of our doctors is about $1,000 a month he says, commercial bribery and china's drug sector is very common. it's an open secret. they faced trouble breaking into this mar

glaxo is beating the hungry incompatible with economic interests of donor countries? for the united states, the answer is no. for europe and france, it is yes. >> with that we will wrap up this edition of be on business. thank you for watching. if you want to watch the show again our previous edition of the program, you can head to our website. also you can check out our what -- iphone and android applications. stay with us, we have more news coming your way. >> the show is based on our network of observers, who tell us what is going on where they live and send photos and videos to document it. we verify at all here in paris and bring the best to you. the biggest city in syria, aleppo, is currently split in half. one side is held by the rebels, the other by the army. the rebels have established a blockade to stop goods from reaching the army soldiers. that means severe shortages of food and other basic goods. to find them, we have to go into the rebel zone, which is very risky. our observer tells us about the city's most dangerous checkpoint. >> the check. separates t

executives at british drug maker glaxo smith kline have confessed to a massive corruption scandal. executives admitted to bribing doctors, hospitals and government officials in order to boost drug sales in china. a spokesperson for the company says it is cooperating with the investigation. as the investigation continues into the crash landing of asiana flight 214, new questions are being raised about the plane's seatbelts. doctors treating victims of the crash say many injuries are related to the lap-only-style seat belts. the national transportation safety board will investigate whether a different seat belt could have prevented those injuries. the crash of flight 214 is having a ripple effect on air travel this week. flyers across the nation face delays as san francisco's airport recovers from the crash, which shut down one of the hub's four runways. bad thunderstorms also impacted travel out of new york, atlanta and detroit. 375 flights were cancelled, and 3,900 flights were delayed. americans did more buying than browsing in june. retail sales in june rose 4.1%, beating out for

george, are you invested in gsk in >> yes, i do hold glaxo. >> is that a big concern to you?ll, the reason i hold it is because of the change in law in america, the fda, and the ability to fast-track some new drugs and whether there's a clear medical need, and that's more important. the drug companies are really driven by what happens in america. of course, anytime you see bribery and corruption, it is of huge concern. i'm monitoring the situation very closely. >> but i mean, let's not be naive here. it's certainly not the only company that engaged in these sort of kickbacks. it's very common even in the u.s. and especially in emerging markets. as companies are trying, especie especially pharma companies. >> yeah, it's huge in emerging markets, especially china and what is behind the sort of sales of high-end clothes or fine wines is much of that because it's an easy way for people to transfer a gift to, you know, an official in the right place. and we've seen it time and time again across different industries, and it is one of the risks with executing business in that part o

. >>> glaxo smithkline says it is deeply concerned by corruption allegations in china.y have accused the british drugmaker of being the ring leader in a multimillion dollar bribery scandal saying it used agents to bribe doctors and officials for sales. it is cooperating with authorities and stopped using travel agencies identified in the investigation. glaxo shares today off half a percent in london. >>> in japan, the nikkei ended hi higher. let's get more, joining us from tokyo, sushiko. >> fuji heavy industries rose 1.7% today after the nikkei news reported that the firm's expected to report a record quarterly operating profit. it is posted to around $700 million operating profit for the april/june quarter, up 300% on the year. the strong profit is supported by solid sales overseas of new car models. may was a monthly record. as one of the major exporters in japan, the weaker yen lifted the company's privating profit by more than $200 million for the quarter. sales also grew in the domestic market as well. and cost cutting efforts also contributed to the strong earnin

you've been talking about glaxo all week.d this flash, been showing the chinese commerce industry is saying glaxo investigation won't affect china fdi, but reputation is something that the western companies really rely on in the like of china. if you started to destroy that, doesn't that just remove the edge the western companies have in the profitability? >> unilever had a strong story of corporate responsibility. so i'm not too sure what would be impact if there would be a negative impact in the economy or in china. in terms of corporate responsibility, i think one of the risk is probably in europe, in the uk, the government tried to introduce the traffic lights system. and a lot of company, like nestle, approved this labeling -- few company did not approve. coca-cola and unilever. i think it is odd with usually the high level of corporate responsibility. >> i think you're right. the multinationals risk has been increasingly important for all multinationals and reputational risk and supply chain risk is a big part of the fo

and take, for example, glaxo, which you featured on the program earlier, glaxo was able to raise whatoney at 1% interest, it is crazy. bernanke seeing the enormous amounts of money which they weren't using for an economic benefit stepped in with a few choice words and.a stop to the whole thing. >> it was something he was talking about. when it comes to the timing and tapering, some people out there are saying, well, it is not going to happen until 2014. it is not even going to be a story this year with tapering starts. what do you think? are we looking at some form of the program to happen in september? >> i don't think it really matters. at the end of the day -- >> why does it not matter? this is where the market was spooked. why are we saying it is okay. >> it is important to step back and look at the bigger picture. we live in this alice in wonderland world at the moment where everything is artificial driven by the fed. we need to get to position where the economy is healthy and interest rates are back at normal positions. exactly when we start to move to that position is not that

palmer glaxo's smithkline. charles schwab went there. it's amazing. i love to see this.s per year, hopefuls. only 398 good except it. what is -- and i know many @%alities are important, but what is the number one quality every one of the applicants really must have before they will be considered? >> first the numbers are slightly higher. this year we had about 7200. so our acceptance rate is even lower than the one you mentioned i think the main thing that we look for is people who are distinctive and that we think will create change. we don't necessarily be people who will go on to make a lot of money. it's about people who will be change agents. our motto is chase lives, change organizations, change the world. we look for people that we think will have a tremendous impact it whenever they end up doing. so we bring in students who have backgrounds in the military, and the nonprofit who do teach for america as well as people who did their undergrad at princeton and worked at goldman. we try to get as diverse as possible given the limits that we have. and that is somethin

. >>> glaxo smithkline used travel agencies to bribe officials and doctors to illegally boost sales and raise prices of drugs sold in the country. the six-month investigation revealed 700 middlemen. the drugmakers says it stopped using the travel agencies named in the investigation, and they're now conducting a thorough review of all transactions related to the agencies. >>> this morning, japan's two biggest stock exchanges are merging operations. more than 3,400 companies are now listed after the tokyo stock exchange and the osaka securities joined forces. japanese officials say trading was smooth today with no glitches reported. the merger now creates the third-largest exchange behind the new york stock exchange and euro next. >>> yahoo! has won an important case in a case against domestic surveillance. they may be able to reshe some of the ways it's forced to give up user data. >> that's right. this yahoo! victory is filled with maybes and we'll sees. but the bottom line is a federal court has told the government it should declassify some of the information behind a recent request fo

now glaxo scandal is feeding the perception among international firms china is even less welcoming. >happening is that they're going after foreign companies right now to soften up the political ground because they're going to be going after state enterprise later in the year. >> reporter: a tip-off of possibly even bigger change. and government officials have been visiting other drugmakers as well as part of this widening investigation. >> eunice, thank you. this is an incredible story and one that we are watching very closely. thank you for bringing that to us. again, that's eunice yoon. >>> coming up, more than just child's play. we'll talk about the big business of toys with the ceo of step 2 next. and then at the top of the ho , hour -- >> more on detroit, dan gilbert will be calling in at the bottom of the 7:50 hour too. >> bottom of the hour. >> at the top, we have brian in detroit. >> top of the bottom. >> at the bottom of the hour -- >> top of the bottom. >> we have a lot more to come. stick around. "squawk box" will be right back. . >> it's "squawk box" in toyland, a company

. >>> new developments in the glaxo smithkline deal.bid to boost sales in china where police also are accusing the pharma giant of illegally inflating drug charges. several executives have been detained in connection with the probe. as far as the shares are concerned, pretty flat. the company says it will cooperate with tlorts. the still to come, citigroup. will investors be able to bank on the company's figures? we'll get a preview after this. >>> second quarter growth was 7.5% below the pace clocked in q1. that figure was expected although economists are still wondering if beijing will want to hold off on stimulus and for how long they will. june industrial output did disappoint. retail sales managed to ring in above estimates. despite the downward pressure on 0 growth the pboc will do its part to keep flowing to small businesses. up for most of the session, down on the session lows right now. 30% higher for the ftse. german market up over a tenth. the cac up nearly a half. u.s. futures haven't really indicated very much during the se

like in mexico, or china, that you have the same sort of playing field that we have and automatically glaxo that they're at fault here, when to do any business over there, i'm sure you got to play by the local rules, just like in -- you were shocked that walmart had actually to deal with local officials to build in mexico. >> it appears it was done in secret. they knew what they were doing wrong, they were moving money through the travel agencies, creating conferences that didn't exist, paying for trips that didn't -- >> you know how hard it is to get market access in china and you're ready to sell all of our bacon to the chinese. were you out in the truck? did you see that? we'll have none of that next year. >> the bacon. >> or the sausage or any pork products whatsoever. any pork products. if that's the world that you want to live -- i love your blackberry when i think about it. i miss mine. >> you don't e-mail anymore. you don't text. >> are they a sponsor of -- yeah, i love -- i miss mine. i miss my blackberry a lot. coming up, chopping trading in yahoo! after the company posted quarter