SHANGHAI, China Amid a government crackdown on corruption involving Communist Party officials and businesses, police here have arrested 22 people, including at least one official of McDonald’s Corp., for alleged bribery linked to computer purchases, according to published reports.
In all, employees from seven companies, including McKinsey & Co. and Whirlpool Corp., were among those detained, according to a CFO.com account of a Jan. 19 report in the English-language Shanghai Daily.
The newspaper said Shanghai police disclosed Jan. 18 that an investigation begun last May had found bribes equaling $515,000 were made to the companies' directors, senior employees, and other individuals by four computer network companies that sought equipment orders. Formal charges had not been filed, the newspaper said.
The identities of those arrested were not provided.
McDonald’s officials at corporate headquarters in Oak Brook, Ill., did not return calls seeking comment.
But the website CFO.com quoted from a statement it said had been issued by Shanghai-based McDonald's China asserting "that this incident occurred several months ago" and that the McDonaldÕs employee who was implicated was "immediately terminated."
The Shanghai Daily report was published on the same day that McDonald’s China chief executive Jeffrey Schwartz presided over the debut of Beijing’s first McDonald’s drive-thru. The Jan. 19 opening brought the chain’s Chinese system to a total of about 780 restaurants in 120 cities, including 15 other drive-thrus.
The website of China’s official Xinhua news agency does not carry a report on the arrests, but on Sunday it quoted the Communists’ discipline commission as indicating that it had brought “government officials’ collusion with the business people” to the forefront in the campaign against corruption. Xinhau said the commission had linked party officials’ ties to business people to an unspecified number of the 3,128 corruption cases involving $121 million that were uncovered between August 2005 and June 2006.
Separately, McDonald’s Corp. CEO James A. Skinner was quoted Wednesday as telling analysts and investors during the company’s fourth-quarter-earnings conference call that its restaurants in China would begin selling breakfast items this year and that drive-thrus are “critical to our long-term development plan in China.” But, Skinner said, the company would not begin franchising there, or in Russia, for perhaps five years because infrastructure and “franchising laws ... just aren’t where they need to be.”
China’s largest foodservice chain, Yum! Restaurants China, has expanded there to more than 2,000 KFC and Pizza Hut outlets, but only recently began franchising a relatively small number of outlets.