According to National Business Daily, the New York-based cosmetics company Avon Products Inc. has suspended four of its executives, including three from its China operations, over a bribery investigation.
The three Chinese executives involved are said to be S.K. Kao, the president of the Chinese unit; Jimmy Beh, its chief financial officer; and C.Q. Sun, the head of the corporate affairs and government relations group. The fourth employee who was suspended is reported to be Ian Rossetter, Avon's former head of internal audit.
Avon confirmed that the four employees had been asked to take administrative leave before the final investigation result comes out.
Avon announced that it had been investigating alleged improper business practices in China since June 2008. The probe, which the company disclosed to the Securities and Exchange Commission and the Justice Department of the United States, was sparked by an employee who wrote a letter to Andrea Jung, the CEO of Avon, about improper spending related to travel with Chinese government officials.
Two months after China opened its direct-selling market on December 1, 2005 Avon received its first direct-selling license in China and was given approval to set up 74 branches with a total of over one thousand outlets in the country. Avon's rapid winning of the license and approval was said to be associated with Deng Zhan, who then worked as deputy director of the Foreign Fund Division of China's Ministry of Commerce and who was detained in September 2008 for allegedly accepting bribes.
It is said that Avon's investigation now involves more countries in addition to its China operations. The scale of the alleged bribery has also grown from initial amounts of several million dollars.
