The Sunday Times has reported that a sex tape featuring former GlaxoSmithKline China boss Mark Reilly may have been the catalyst for the investigation that has swamped the drugs major in the country.
The newspaper has published a lengthy piece looking at the way GSK China has been run and focuses on a secretly filmed video of Mr Reilly and his girlfriend at his flat in Shanghai which was emailed to senior staff including chief executive Sir Andrew Witty. The email also included allegations about GSK using travel agents to channel kickbacks to doctors and Chinese officials.
The Sunday Times reports that Mr Reilly was confronted with the video on a trip to London and on his return to China, he hired a private investigator Peter Humphrey, paying him £20,000. His probe focused on Vivian Shi, formerly GSK’s head of government affairs in China. During 2012, 23 anonymous emails were sent to the Chinese State Administration for Industry and Commerce, alleging bribery and corruption authorised by senior managers and the newspaper alleges that inside GSK, “executives suspected that Ms Shi was the author”.
It notes that the company investigated the claims but its inquiries revealed nothing and Ms Shi left by mutual consent. Mr Reilly was charged with running the operation but he did not speak or read Chinese; The Sunday Times cites an incited person who knew him as saying that “he was all at sea”.
However last July, Mr Humphrey and his wife were arrested in China and the couple have been in detention ever since. In May this year, Mr Reilly, who had left China but then agreed to return to the country to be interviewed by police, was officially charged with bribery and fraud.
Shortly after, the UK’s Serious Fraud Office opened a formal criminal investigation into the group’s commercial practices.
The company sent PharmaTimes a statement, saying that “the issues relating to our China business are very difficult and complicated”, adding that the investigation by the Chinese authorities “remains ongoing and we are co-operating fully with this investigation. Out of respect for the process, we cannot comment on it at this time”.
GSK continued by noting that “we have zero tolerance for any kind of corruption in our business and we have many policies, procedures, controls in place to monitor this and we take action against any breaches”. It noted that “as we have said previously, the allegations that have been raised are deeply concerning to us. We have committed significant resources to find out what happened in China, including an independent legal review”.
Adding that “we also continue to make fundamental changes to our business in China”, GSK said that “we are learning lessons from this situation and we are determined to take all actions necessary as a result”.