“…Herve Gisserot replaces Mark Reilly, who left China after four executives were detained in the nation last month. Gisserot was the senior vice-president of Glaxo’s European business.
Reilly will become part of the drugmaker’s senior executive team in London, said Simon Steel, a company spokesman….”
“….GSK was ordered to pay the £297m fine – the largest the Chinese Government has ever handed out. It published an apology to “the Chinese government and the Chinese people” on its website, saying it had “reflected deeply and learned from its mistakes”.
GSK’s China boss, Mark Reilly was given a three-year suspended prison sentence with a four-year probation period. He is to be deported from the country, although the drug maker said he remained in the country as he waited to hear if he had to spend his probation period in China.
Mr Reilly and his Chinese girlfriend featured in a sex tape that was emailed to several senior executives of the drug maker last March. GSK then hired Peter Humphrey, a British investigator based in China, to look into the origin of the video. Mr Humphrey was jailed for two and a half years in August for illegally acquiring the personal information of citizens….’
Blackmail, a sex tape and the fatal error that’s left a top British executive facing 20 years inside a hell-hole Chinese jail
- Mark Reilly, 52, was a high-flying businessman with GlaxoSmithKline
- Police raided GSK’s offices and questioned him amid bribery claims
- In May he was formally accused of presiding over ‘massive bribery network’
- It’s emerged that investigation was triggered by sex tape featuring Mr Reilly
- ‘Regardless of facts, Mark Reilly will be found guilty,’ said one legal expert
At first sight, it looks like any other casual family portrait: a middle-aged man, with grey hair and a square jaw poses proudly next to his two grown-up daughters.
The fetching ‘selfie’ was uploaded to image-sharing website Instagram a fortnight ago by the girl standing at its centre, an 18-year-old student from Hertfordshire called Louise Reilly.
‘A bit late, but happy Father’s Day to my wonderful daddy,’ she wrote in the accompanying blurb. ‘I love and miss you every day.’
Daddy’s girls: Mark Reilly with daughters Louise (centre) and Jessica. Last summer he was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence
Louise took the picture at a cocktail party in December 2012, shortly after winning a place to study geography at Oxford University.
Her elder sister, Jessica, who is 21, and studies history at Cambridge University, is standing to her left. Yet, as the statement she chose to accompany it hints, an air of sadness now surrounds this seemingly happy photograph.
That’s because the middle-aged father so proudly showing off his high-achieving daughters is one Mark Reilly — a senior executive with British drugs giant GlaxoSmithKline (GSK).
Mr Reilly, 52, was until recently a high-flying businessman with the world at his feet. A glittering 25-year career at GSK had left him dividing time between the Far East — where he ran the £76 billion firm’s Chinese operations — and the exclusive commuter town of Sawbridgeworth in Hertfordshire, where he lived with his wife Jill in a £1.2 million Grade II-listed 17th-century house.
His daughters had been educated at Bishop’s Stortford College, a prestigious £25,000-a-year private school, where they excelled at sport, music, and drama, each achieving ten A* grades at GCSE, four A* grades at A-level and sailing into Oxbridge.
Last summer, however, Mr Reilly was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence.
It became public on June 27, when police in China organised a high-profile raid on GSK’s offices, amid claims that staff were illegally bribing doctors and healthcare officials to prescribe pharmaceutical products.
A few weeks afterwards, they called Mr Reilly in for questioning. He was promptly banned from leaving the country, and has since spent most of his time in various forms of detention.
Sadly, like anyone facing legal problems in autocratic China, Mr Reilly’s human rights have since been blithely disregarded by the authorities.
High-powered: Mark Reilly’s wife Jill, who also has a job at GSK. He faces 20 years inside a Chinese jail if found guilty
For months, he had only limited means to communicate with friends, family, and legal representatives, and was unable to see Louise, Jessica or Jill.
Then, in May, this already perilous situation took a turn for the worse. At a police press conference in Changsha, a 90-minute flight west of Shanghai, Mr Reilly was formally accused of presiding over a ‘massive bribery network’ in which doctors and health officials were illegally paid £320 million over several years.
In scenes reminiscent of a Soviet-era show trial, detectives aggressively dubbed him a criminal ‘Godfather’, who they claimed had greased palms with cash and free holidays, and arranged for associates to be given sexual favours from prostitutes.
They refused to take sceptical questions from assembled reporters, instead reading a pre-prepared statement recommending that this supposed ‘criminal’ be prosecuted on multiple counts of bribery and fraud.
The news conference deepened a scandal which had already knocked billions of pounds off shares in GSK, a leading FTSE-100 blue-chip firm held by many pension funds, and damaged Anglo-Chinese diplomatic relations in the process.
In the cold light of day, it also represented a serious affront to justice, compromising a universal principle of fairness: that Mr Reilly should be presumed innocent until proven guilty.
In China an astonishing 98 per cent of court proceedings end in conviction, and this father-of-two now faces the likelihood of a criminal trial.
‘This is a politically charged case, and China’s politicians control the judiciary.
‘So regardless of the facts, Mark Reilly will be found guilty,’ says Professor Willy Lam, a leading expert on China’s justice system. ‘The question of whether he actually committed a crime will not really be considered. The government will also dictate how long the judges will imprison him for.’
The British Consulate in China says it is following Mr Reilly’s case. Yet despite this, Professor Lam, a scholar at the Chinese University of Hong Kong, says that he will be effectively tried in secret.
‘There will be no jury. Just a judge and his assistants who decide the verdict.
‘There will be no media allowed in court, and no scrutiny of evidence. He may be allowed a few relatives and close colleagues present, and perhaps a UK diplomat. That is all.’
As to his eventual fate, Professor Lam adds: ‘Given the amount of money involved, this is a very serious case, and Mr Reilly could easily be sentenced to life. I expect him to get around 20 years.’
In any normal country, that would be bad enough. But this is China, home to one of the world’s most punitive penal systems.
Indeed, the vast Tilanqiao Prison in Shanghai, where Reilly is likely to end up if convicted, is known locally as the ‘city of death’.
Former inmates at the facility have told how guards carry cattle prods and force errant inmates to submerge their heads in buckets full of excrement and urine.
In the notorious ‘punishment wing’, beatings are rife. Human rights groups have published lengthy critiques of torture methods practised there.
So far, so ugly. But last weekend, this father-of-two’s plight became darker still.
In an extraordinary development, it emerged that China’s police investigation into GSK had been triggered by the circulation of a covertly recorded sex tape, in which Mr Reilly featured.
The video was secretly shot at the British businessman’s Shanghai apartment during 2012 and appeared to show him having extra-marital sex with a young Chinese woman.
It was emailed to a range of senior figures at the drug company last January, as part of what appeared to be a bid to threaten or blackmail them.
In a dramatic twist, I can reveal that the woman it depicted was a secretary who worked at a travel agency accused of helping GSK execute its ‘bribery’ scheme.
Family man: Mark Reilly with daughter Louise. One legal expert said that, regardless of the facts, Mr Reilly will be found guilty because it is a ‘politically charged’ case
Even without that tricky fact, the addition of a sex tape to an already snowballing corporate scandal was hugely embarrassing for GSK (which says it is ‘co-operating fully’ with the Chinese investigation), and deeply upsetting for Mr Reilly and his family.
Yet its existence also, surely, suggests that someone, somewhere, is going to very great — not to mention underhand — lengths to bring him and the company down.
Mr Reilly’s nearest and dearest certainly suspect so. Louise and Jessica are (on the advice of the Foreign Office) maintaining a dignified silence, for fear of further provoking the Chinese authorities.
So too are Mark’s mother, brother and sister. However, close friends tell me they are increasingly convinced that Mr Reilly is the hapless victim of an organised sting. ‘Mark has certainly made mistakes,’ says a source with intimate knowledge of the case.
‘He has made bad decisions in his personal life, particularly this sexual indiscretion, and done the odd thing he regrets in business.
‘But is he some sort of master criminal? Of course he isn’t. Does he deserve to spend 20 years in jail? Absolutely not. It’s a terrible stitch-up.’
The source said Reilly has been ‘in and out of detention’ for the past year, sometimes in formal custody, more often in hotels with police officers stationed outside his room.
He remains an employee of GSK, but is able to have only ‘very limited conversations’ with either the firm, his lawyers, or even his daughters, who in an effort to lighten their mood have taken to calling themselves ‘Team Reilly’.
Dedicated: Mr Reilly was a company ‘lifer’ who joined the firm in 1989, shortly after leaving university. He and Jill had previously worked in the U.S. and Singapore before he was offered his role in China
‘The family’s first and only priority is to secure Mark’s safe return,’ the source said.
‘But this is China we are dealing with, so things don’t look good. For a man who had so much, it’s very, very sad.’
Mr Reilly’s ill-fated Chinese adventure began in 2009, when he was offered a promotion to become general manager of GSK’s pharmaceuticals division there.
A company ‘lifer’ who joined the firm in 1989, shortly after leaving university, he and Jill (who also has a high-powered executive job at GSK) had previously worked in the U.S, where Louise was born, and Singapore.
With their then-teenage girls in secondary school, Reilly was reluctant once more to uproot his family, however. So he decided to move alone to Shanghai, where Jill and the children would join him in school holidays. On paper, the move represented a fantastic career opportunity.
Though GSK is one of the world’s largest drug companies, its footprint in China is relatively tiny. Indeed, although the country boasts more than 1.3 billion citizens, and is growing dramatically wealthier, it still represents just 3.5 per cent of the firm’s global sales.
Reilly duly set about dramatically increasing the firm’s revenues, setting ambitious sales targets for his mostly Chinese staff. But his eagerness to pursue those goals sparked friction with local authorities.
‘Like most companies in its field, Glaxo has a highly aggressive sales culture,’ says a Shanghai-based source with knowledge of the company’s operations.
‘Sometimes, that has got it in trouble with regulators.’
‘In China, it doesn’t work like that. Get caught, and you’ll go to prison’ – A Shanghai-based source
A few years ago, for example, the firm was ordered to pay a record $3 billion (£1.7 billion) fine in the U.S. after being caught illegally paying doctors to prescribe dangerous drugs. ‘Mark was steeped in this culture, where you push the rules to the limit in order to succeed.
‘Sometimes, you overstep the mark, and the company has to row back, apologise, or even pay a fine,’ adds the source.
‘In China, it doesn’t work like that. Get caught, and you’ll go to prison.’
Trouble began in 2012, when an anonymous whistleblower, thought to be a disgruntled GSK employee, began sending emails to China’s healthcare regulator, making wild allegations about sales practices.
A total of 23 messages were sent, alleging that GSK staff were routinely bribing doctors and healthcare professionals with the authorisation of senior managers. However they were short on details. In January last year, the stakes were raised, significantly.
An 11-page email was dispatched from the address ‘firstname.lastname@example.org’. In its subject line it claimed to contain a ‘notification of bribery by GSK in China’.
The email — a copy of which has been passed to the Daily Mail — alleged that the firm ‘has engaged in illegal marketing and large-scale bribery to sell its products to Chinese hospitals and doctors’.
It claimed, among other things, that sales staff were wired £1,000 each month from a Citibank account to wine, dine, buy prostitutes for, and pay cash bribes to ‘key decision-makers’ in the purchasing departments of hospitals.
The email named names and gave dates. It told how attempts were made to conceal payments, and accused the firm of doing little to prevent endemic bribery.
It would later end up in the hands of the police, who appeared to quote it (at times verbatim) in May this year, while outlining potential charges against not just Mr Reilly, but 45 of his Chinese colleagues.
‘Is what the email alleges true? I have no idea,’ says the Shanghai source. ‘Even if it is, Mark didn’t know every detail of what went on. He hardly spoke Chinese, for starters.
How could he have known? Shanghai is a very fast city. It’s easy to get caught up in the idea that everyone’s a bit dodgy and you have to do dodgy things to get along. If the allegations are true, I could see how it could have happened. But he’s no crook.’
Unfortunately, for Reilly, his case nonetheless struck a potent political chord. The Beijing government is attempting to crack down on a ‘backhander culture’ traditional in Chinese business circles, and GSK, as a wealthy multinational, makes an ideal target.
‘By coming down hard on someone like Reilly,’ says Prof Lam, ‘the authorities can show people that bribery is something they are taking seriously.’
If that was indeed their aim, they were handed a further gift in March last year, when a second email was sent, from the same address, to a separate group of senior staff.
This added details to corruption claims, claiming that doctors and their families were given free holidays in India, Brazil and Japan by GSK, under the guise of attending conference. Agencies were hired to organise luxury travel, and hand them thousands of dollars in cash as ‘speaking fees’, it said.
Attached to the email was large computer file. It contained the tape of Reilly and his mistress. The video was shown to Reilly soon afterwards, during a visit to GSK’s headquarters in London.
He promptly returned to Shanghai and hired a fellow British national, private investigator Peter Humphrey, to establish who had leaked it.
That investigation was still ongoing in late June last year when police carried out their high-profile raid on GSK’s offices. Mr Reilly promptly flew to the UK, on a scheduled holiday.
However several weeks later, he bizarrely decided to return to China to (as GSK put it) ‘help police with their inquiries’.
That move, which of course led to his detention, has until now been shrouded in mystery, since it seems inconceivable a right-thinking British citizen facing any prospect of prosecution in a country such as China should freely travel there.
However, I understand that Reilly was at least partly motivated to return in an ill-fated effort to suppress the sex tape.
‘At the time, you have to remember that Mark was a married man,’ says a close friend. ‘His wife did not know that he had committed any indiscretion.
Posted on Monday 30 June 2014
Daily MailBy Hugo Gye29 June 2014
A covert sex tape involving a senior executive and his Chinese lover was the trigger for a major investigation into corruption at British drugs giant GlaxoSmith-Kline, it was revealed yesterday. The video of married Mark Reilly and his girlfriend was filmed by secret camera and emailed anonymously to board members of the pharmaceutical firm. It led to an investigation that has rocked the £76billion company – which stands accused of bribing doctors and other health officials in China with £320million of gifts, including sexual favours from prostitutes, to persuade them to prescribe its drugs.
Mr Reilly, who ran the company’s Chinese business, was charged six weeks ago with running a ‘massive bribery network’ involving £90million of illegal sales and banned from leaving the country. It was the culmination of a year-long corruption investigation into the FTSE 100 firm. But yesterday, it was revealed the scandal first erupted after the sex tape was emailed by ‘GSK whistleblower’ to board members, including chief executive Andrew Witty, in March 2013, in what was believed to be a threat or blackmail attempt. The footage showed father-of-two Mr Reilly, who is separated from his wife, having sex with his Chinese girlfriend.
He was given permission to hire investigator Peter Humphrey, 58, to find out who had hidden the camera in his Shanghai flat and who had sent two separate emails making serious fraud allegations. The £20,000 probe, codenamed Project Scorpion, focused on disgruntled former employee Vivien Shi, 49, a prominent businesswoman whose family is part of Shanghai’s communist elite. But a few months after starting to investigate Miss Shi, Mr Humphrey was arrested along with his wife Yu Yingzeng, a US citizen and daughter of one of China’s most eminent atomic weapons scientists. According to the Sunday Times, Mr Humphrey’s arrest and detention in July was at around the same time that China began a police probe into GSK’s alleged bribery.Mr Reilly, 52, of Sawbridgeworth, Hertfordshire, stepped down from his post as China manager soon after Mr Humphrey’s arrest but remains a GSK employee. He returned to Britain around the same time but voluntarily went back to China within days to assist police with their inquiries. He was charged in May this year and accused by police of presiding over a web of corruption and pressing his sales teams to bribe health officials to meet targets…hat tip to pharmagossip…
If found guilty, Mr Reilly, who has a PhD in pharmacology and neurosciences from University College London, could face life in prison. Mr Reilly joined GSK in 1989 and has worked in Singapore, Hong Kong and China. He is separated from Jill, 49, with whom he has two teenage daughters, and has moved out of their £1.2million home. It is understood he met Mrs Reilly at university, where she was studying psychology. Like her husband, she took up a post at GSK, working as a director of capital planning…
In with no echo…, I was hypothesizing that by settling out of civil and criminal suits, the pharmaceutical companies avoid any verdict, and invariably quickly say “we admit to no wrongdoing” implying that they settled for who-knows-what reason [like admitting to the least ignoble of the charges]. In doing that, they dampen the incriminating story which then fades quickly – the anechoic effect [see echo echo echo echo echo echo…]. The most obscene version was GSK settling a $3B suit and signing this agreement – then writing a response in a letter to the Chronicle of Higher Education that denies admission of guilt [see the only enduring contract…]. The way this China-gate story is going, it doesn’t at this point look like that’s going to be an option. This is just plain old crime, and one that has the Chinese up in arms [as it should].
Last month, Britain’s Serious Fraud Office announced it is to investigate the company’s ‘commercial practices’.