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Coca Cola Says China Ex-Employee Held Over Corruption

Source: Reuters
14/09/2009

Beijing, Sept 13 - A former employee at one of beverage giant Coca-Cola Co's Chinese bottling plants is being held by police in connection with a corruption investigation, a spokesman for the firm said on Sunday.

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The detainee worked at Shanghai Shenmei Beverage & Food Co Ltd., but the company declined to give further details.

"We can confirm that a former employee at our Shanghai (Shenmei) bottling plant has been detained by the police," said Kenth Kaerhoeg, group communications director, Coca-Cola Pacific.

"Our bottler is actively cooperating with the police investigation in strict compliance with relevant laws and regulations."

The Chinese language National Business Daily reported the corruption covered about 10 million yuan ($1.47 million). Kaerhoeg declined to comment on the amount of money involved.

Coca-Cola currently operates 38 bottling plants in China, employing 30,000 people directly. Its business in China grew by 19 percent in 2008, making it the company's third-largest market.

The news of the detention comes around a month after the formal arrest of four employees of Anglo-Australian miner Rio Tinto on suspicion of obtaining commercial secrets and bribery.

Stern Hu, a Chinese-born Australian who is Rio Tinto's head of iron ore marketing, was one of the group and the move and his detention in particular provoked an international outcry.

Australian Prime Minister Kevin Rudd has warned China it had significant economic interests at stake in detaining Hu and that the world was watching how it handled a case that has highlighted the risks of doing business in the world's third-largest economy.

However, Australia has insisted the case would not harm trade relations with China. China is Australia's biggest trade partner.



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