Chinese investigators said executives from GlaxoSmithKline, the British drug giant, had admitted using bribes, kickbacks and other fraudulent means to bolster drug sales.
The Ministry of Public Security said on Thursday that the drugmaker had bribed doctors, hospitals and government officials and funneled illicit pay-offs through travel agencies, pharmaceutical industry associations and project financing.
The Chinese government did not name executives or give detailed figures. But it said the case involved "huge amounts of money".
The investigation appears to be part of a broad government crackdown on fraud and corruption involving foreign companies.
The announcement came about a week after the authorities raided offices and detained people working for GlaxoSmithKline in three cities, including Shanghai, according to the state-run news media.
The government findings
were unexpected because GlaxoSmithKline executives had said last week an internal investigation of its China operations found no evidence of corrupt activities.
A spokesman said the company held its own investigation after a whistle-blower came forward with accusations of wrongdoing.
On Thursday a spokesman for GlaxoSmithKline said the company was willing to co-operate with the investigation and that the Chinese announcement represented the first details of the case the company had been informed about.
"We take all allegations of bribery and corruption seriously," the company said. "We continuously monitor our businesses to ensure they meet our strict compliance procedures. We have done this in China and found no evidence of bribery or corruption of doctors or government officials. However, if evidence of such activity is provided we will act swiftly on it."
Regulators in China are reviewing the prices and production costs of major Chinese and global drug companies in what appears to be an effort to lower drug prices.
China is one of the world's fastest-growing markets for pharmaceuticals, but the government has long held tight control.
In a country where kickbacks and bribery are common it is not unusual for major corporations to come under scrutiny from Chinese or Western regulators.