Coke Co probe leads to multiple bribes

(China Daily)
Updated: 2009-09-17 08:20

SHANGHAI: A corruption scandal involving two former employees at a Chinese bottling plant of beverage giant Coca-Cola Co may lead authorities to more than one bribery case, the local prosecutors' office said.

"The alleged suspects were handed over from the police to us about two weeks ago, but we have yet to finish a thorough investigation as the case is complicated in that it may concern several briberies," Lu Feng, a press officer from the Shanghai Pudong New District Prosecutor's Office, told China Daily Wednesday.

But it's highly unlikely the detainees who worked at Coca-Cola's bottler Shanghai Shenmei Beverage & Food Co Ltd would face a life sentence, Lu said, without giving more details.

Kenth Kaerhoeg, Coca-Cola Pacific's group communications director, said in an earlier e-mailed statement that two former local employees at its bottler Shenmei have been detained by the police for allegedly extracting kickbacks from suppliers. The two employees left the company in early 2008 and May 2009 respectively.

But he refuted media reports that the two were involved in bribery of government officials, adding that Shenmei "is actively cooperating with the police investigation in strict compliance with relevant laws and regulations."

Nanfang Daily reported on Sept 12 that one detained worker from Shenmei's marketing division surnamed Zhu took more than 10 million yuan in bribes, citing an unidentified person. But both Shenmei and Coca-Cola's Kaerhoeg would not comment on the amount of money involved.

Coca-Cola currently operates 38 bottling plants in China, among which Shanghai Shenmei was the largest with $139.3 million total invested capital. The Atlanta-based beverage giant posted 10 percent business growth in 2008 in China, making it the firm's third-largest market globally.

The Coca-Cola bribery scandal follows the formal arrest of four Shanghai-based employees from Anglo-Australian mining giant Rio Tinto last month on suspicion that they carried out commercial bribery and released trade secrets. Stern Hu, a Chinese-born Australian who was general manger of Rio Tinto's Shanghai office, was among those arrested. The case caused an international outcry against commercial corruption among multinational corporations. The investigation is still underway.

To curb the growing cases of commercial bribery, the country's Supreme People's Procuratorate this June amended the bribery laws, created in 2006. Before, the law addressed briberies in only five sectors: construction, finance, healthcare, education, and government procurement. Today the law covers any bribe in any commercial enterprise.