The Ministry of Public Security's crime investigations chief Gao Feng said authorities had discovered $489 million that had been funneled into the country through travel agencies, a sum well beyond what the agencies have been booking from their travel businesses.
Gao said the investigation has also uncovered evidence of bribes in the form of sexual favors, The Wall Street Journal reported.
The company said it was cooperating with authorities and was "disappointed by these serious allegations of fraudulent behavior and ethical misconduct."
The company also said it was no longer doing business with the travel agencies named in the investigation, the Journal said.
The case revolves around doctors and hospitals accepting payments for prescribing GlaxoSmithKline pharmaceuticals, including off-label uses, authorities said.
The company also said it is working with U.S. officials on their investigation into the alleged bribes.