ILLINOIS' DEERFIELD-BASED BAXTER INTERNATIONAL INC. FINDS EXPENSE VIOLATIONS BY CHINESE PARTNER

ILLINOIS' DEERFIELD-BASED BAXTER INTERNATIONAL INC. FINDS EXPENSE VIOLATIONS BY CHINESE PARTNER

Crain's Chicago, 08/04/13, By Kristen Schorsch

Baxter International Inc. discovered expense violations last year after an investigation of its partner in a joint venture in China, according to a report today in the Wall Street Journal.

An anonymous tipster alleged that employees of the venture, Guangzhou Baxter Qiaoguang Healthcare Co., fabricated conferences as part of a bribery scheme, the Journal reported. Deerfield-based Baxter, a medical products company, disciplined the venture's leadership, conducted new training and enhanced its controls and monitoring of interactions with Chinese health care professionals, the Journal reported.

The newspaper did not report the total amount of the improper expenses, but one example involved about $15,100. Baxter hadn't previously disclosed the investigation.

The matters related to the joint venture in China are not new, a Baxter spokeswoman told Crain's. The issues were raised last year through Baxter's regular compliance program, investigated and appropriate actions were taken, she said.

“We take any allegations of violations of our code of conduct very seriously, including with respect to any joint venture,” the spokeswoman said in an email. “We encourage our employees to raise questions and issues through our compliance program, which has allowed us to address them and improve our program and controls.”

A representative of Guangzhou Baxter Qiaoguang could not be reached immediately to comment.

Baxter has a 50 percent stake in the Chinese joint venture, which sells nutritional products given intravenously. Total annual sales of the venture, established in 2007, are about $45 million, the Baxter spokeswoman said.

Baxter, whose broad portfolio includes infusion pumps and products to treat hemophilia and other blood disorders, had $14.2 billion in 2012 sales and has 50,800 employees worldwide.

Baxter shares were trading around $70.50 today, a 2.3 percent dip after closing yesterday at $72.20 a share.