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. Last Updated: 07/27/2016

China Detains 22 in Kickback Inquiries

SHANGHAI -- The police have detained 22 people in a bribery investigation that has ensnared several large companies, including ABB, McDonald's, McKinsey & Company and Whirlpool, China's state-run news media reported Friday.

The Chinese government did not announce formal charges, disclose who was detained or offer a full list of the companies involved. But the media reports said the bribes totaled approximately $500,000 and that some officials were "company directors and senior employees."

The detentions appeared to be part of a broader anti-corruption drive that has been sweeping China, toppling dozens of executives and high-level government officials, including Chen Liangyu, Shanghai's party secretary and a member of the ruling politburo until his arrest in September.

The cases announced Friday seemed to be related to the taking of bribes or kickbacks to win business contracts.

U.S. and European executives have long complained about the need to monitor their own employees because marketing deals in China often involve kickbacks or bribes.

None of the U.S. or European companies named in Friday's reports could offer much detail on the detentions.

A spokesman for McKinsey & Company, a consultancy firm, said McKinsey had not been accused of any crime and that the firm was looking into the matter.

But one McKinsey employee, who asked not to be identified, acknowledged that two people in the firm's computer procurement division were accused of accepting bribes and were detained last May.

Thomas Schmidt, a spokesman for ABB, a Swiss engineering firm, could not confirm that anyone from his company had been detained in Shanghai, but he said ABB, which is based in Zurich, was looking into the accusations of improper conduct.

Executives at McDonald's and Whirlpool in Shanghai could not immediately be reached for comment.

A spokeswoman for the U.S. Embassy in Beijing said the embassy was not aware of any U.S. citizens being detained in the case.

But one executive with a U.S. company, who asked not to be identified, complained that big multinational companies were being singled out by the Chinese government, even though corruption was widespread and perhaps much more prevalent among Chinese companies.

In recent months, several multinational companies have been identified and embarrassed by turning up in corruption cases.

In one prominent case last year, Zhang Enzhao, the former head of one of China's biggest state-owned banks, China Construction Bank, was sentenced to 15 years in prison for accepting over $500,000 in bribes.

Court documents said a "middleman" who worked for IBM, NCR and Hitachi, had collected fees from several companies and passed on bribes to Mr. Zhang while he was serving as chairman of the China Construction Bank.

None of the companies was accused by the government of wrongdoing.

In announcing the detentions Friday, the Shanghai police said 7 companies and 22 workers were being investigated, the Shanghai Daily reported .

The newspaper also reported that the bribes or kickbacks were given to officials at the companies in exchange for equipment orders.

Two executives at a Chinese computer company, the paper said, had confessed to offering $57,000 in bribes to two McKinsey employees and that further investigation had found that the two had collected about $250,000 in bribes between 2003 and 2006 from four computer network companies.