Category: Mark Reilly (GSK)

China to try GSK couple ‘in secret’


http://www.ft.com/cms/s/0/864a9208-020c-11e4-ab5b-00144feab7de.html#axzz36M0MEd00

July 2, 2014 7:29 pm
China to try GSK couple ‘in secret’
By Tom Mitchell in Beijing and Andrew Ward in London,
©CNTV

Peter Humphrey on China state television

The British investigator and his American wife and business partner detained in China because of their work for GlaxoSmithKline will be tried in secret as concerns grow about their health, according to people close to the family.
US consular officials were informed on Wednesday by Chinese authorities that they would not be able to attend the trial of Peter Humphrey, and his wife, Yu Yingzeng, “on grounds of privacy”, a family friend told the Financial Times. The trial, originally scheduled for July 29, has been delayed until August 7.

The couple ran a Shanghai-based investigative firm and were hired in April last year by GSK to look into who had placed a camera in the bedroom of the British pharmaceutical firm’s top manager in China, Mark Reilly. A film of Mr Reilly in bed with his Chinese girlfriend had been emailed to GSK’s chief executive, Andrew Witty, in March that year.
While trials in China are often closed on grounds of national security, closing one because of alleged concerns over privacy is extremely rare.

Mr Humphrey and Ms Yu were also looking into the source of a series of emails sent to Chinese regulators in 2012, alleging that corrupt practices were rife at GSK’s China operations. Mr Reilly, who left China when they were arrested and then returned to Shanghai to aid in their investigation, was this May one of 46 employees identified by the Chinese police as a suspect implicated in “massive and systemic bribery”.

The couple will face one charge of illegally purchasing private information. Another charge, of running an illicit business, has been dropped.
Chinese officials also indicated that the couple’s teenage son, who has not seen his parents since they were detained a year ago in Shanghai, will be barred from the court proceedings.

“I am very worried that family and consular officials are not allowed to attend my parents’ trial. This does not involve state secrets. This does not involve national security. It is about two private individuals, my parents,” Harvey Humphrey said in a statement. “I am surprised at this decision since China wants to promote openness and the rule of law and I hope that they will let me in. I am shocked and upset. I miss my parents, who are not in good health.”

A former journalist, Mr Humphrey was regarded as one of the most experienced investigators working in China. He and Ms Yu founded their firm, ChinaWhys, in 2003 and ran it together in a close partnership. Mr Humphrey was the public face of the business while his wife focused on day-to-day operations.

According to two people close to the family, Mr Humphrey is suffering from a hernia and has difficulty walking and standing. Ms Yu, a China-born US citizen, has kidney problems.
Mr Humphrey and Ms Yu were originally detained in Shanghai on July 10, 2013. Shanghai police travelled to Beijing on the same day to search the couple’s Beijing home, according to one person close to the family.

GSK did not until earlier this week confirm it had employed them. Friends of the couple have expressed concern the British company did not fully brief them of the seriousness of the corruption allegations it was facing, the most detailed of which were outlined in two emails sent to GSK directors in January and May of 2013. GSK declined to comment.
According to the family friend, Ms Yu told US consular officials that “we got caught up in a war unintentionally, but I have no grudges”.

GSK Bribery In China: Was (GSK’s ‘Alleged’ Corruption King Pin) Mark Reilly’s Sex Tape Sent To Andrew Witty?


Strange story from the Daily Mail UK:

http://www.dailymail.co.uk/news/article-2673963/How-secret-sex-tape-plunged-British-drugs-giant-Glaxo-90million-bribery-probe.html


How a secret sex tape plunged British drugs giant Glaxo into a £90million bribery probe

  • Executives at GlaxoSmithKline were sent a sex tape featuring China boss Mark Reilly and his girlfriend 
  • They hired a private investigator to work out who had sent the video 
  • But after he probed a powerful businesswoman, the Chinese authorities cracked down on Glaxo amid allegations of fraud and bribery 
  • Mr Reilly has been charged with illegally selling £90million worth of drugs

By HUGO GYE

Probe: Glaxo's China boss Mark Reilly was caught on camera having sex with his Chinese girlfriend

Probe: Glaxo’s China boss Mark Reilly was caught on camera having sex with his Chinese girlfriend

The bribery probe which has rocked British drugs giant GlaxoSmithKline was sparked by a secretly filmed video showing one of the firm’s managers having sex with his girlfriend, it was claimed today.

The £76billion pharmaceutical company is under investigation in China for allegedly bribing doctors and other officials in order to increase the price of Glaxo’s drugs.

Now it has been reported that the scandal started after a sex tape featuring the firm’s China chief was emailed to senior staff including chief executive Andrew Witty in March 2013.

The footage showed Mark Reilly and his Chinese girlfriend, and was filmed inside his flat in Shanghai, according to the Sunday Times.

After it was sent to Mr Witty and others, Glaxo hired private investigator Peter Humphrey to determine how the video had come to light.

It was thought that the sex tape must have been filmed by someone who had access to Mr Reilly’s apartment building.

Glaxo agreed to pay Mr Humphrey £20,000 for his investigation, which focussed on the company’s former employee Vivian Shi.

However, monitoring the prominent businesswoman appears to have brought him to the attention of the Chinese authorities, and Mr Humphrey was arrested in July last year.

This was around the time that China began a police probe into Glaxo’s alleged bribery – the biggest investigation into a foreign company for more than a decade.

It emerged that, as well as the sex tape featuring Mr Reilly, senior executives had been sent two emails detailing allegations of corruption in the firm’s Chinese division.

Mr Reilly, 52, who is separated from his wife, stepped down as Glaxo’s China boss last July, but after he agreed to return to the country to be interviewed by police he was banned from leaving again.

Email: The footage was apparently sent to executives including chief executive Andrew Witty

Six weeks ago, he was officially charged with bribery and fraud, accused of being involved in £90million of illegal sales.

Soon afterwards, Britain’s Serious Fraud Office announced that it would investigate Glaxo’s ‘commercial practices’ in a probe thought to be linked to the Chinese allegations.

Glaxo told the Sunday Times: ‘The Chinese authorities are continuing their investigation into GSK’s China business.

‘We respect their process and investigation and are co-operating fully.’

The drugs firm has previously admitted that some of its Chinese executives had apparently broken the law in marketing its products to doctors.

Read more: http://www.dailymail.co.uk/news/article-2673963/How-secret-sex-tape-plunged-British-drugs-giant-Glaxo-90million-bribery-probe.html#ixzz3640ToUiF
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Will GSK Withdraw From China Altogether? How Much Will China Fine GSK For Bribery? Will Mark Reilly Sing Like a Canary?


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The current GSK China-gate scandal (which involved a massive 500 million dollar bribery network spanning hundreds of individuals across China) is fast becoming like something straight from a John Le Carre spy novel.

It looks like the Chinese authorities intend to prosecute-  the former GSK head of their Chinese division- Mark Reilly. He could technically face life in prison for what the Chinese claim to be, an extensive bribery network directed by Reilly, involving hundreds of millions of dollars, and several hundred people (including drug reps, Chinese GSK executives, doctors, fake travel agencies, and prostitutes). It will be interesting to see if the Chinese do send Reilly to prison, but what will be even more interesting is- who was above Reilly? and were they directing, or ordering him, to set up this bribery network, which apparently has been in place since around 2009. Will Reilly do a plea bargain with the Chinese authorities, and in return for lesser sentencing, perhaps he will expose others further up the food chain? Only time will tell.

At the moment all we have is speculation, but it is intriguing speculation nonetheless. Another interesting aspect of this China-gate drama is the matter of GSK and their future in China. It has been rumored that, as a result of this Chinese bribery scandal, and a loss of Chinese profits, that GSK might decide to abandon China altogether. Personally, I would be shocked if GSK decide to abandon China altogether – but it will be interesting to see how this saga all unfolds…

http://www.comply.net.cn/Arc-v.Asp?ID=949

 “GSK is rumored to withdraw completely from the Chinese market.  Although GSK denied this rumor, it nonetheless withdrew from RDPAC (i.e., The China Association of Enterprises with Foreign Investment R&D-basedPharmaceutical Association Committee).  In response to why GSK withdrew from RDPAC, GSK explained that it is the concern of GSK that the ongoing investigation of the Chinese government might impact the operation of RDPAC, and the withdrawal is voluntary”

There has also been speculation that the Chinese intend to fine GSK up to 3Billion dollars for their crimes in China. This figure would echo their previous fine for over 3 Billion by the US authorities in 2012. Although it sounds like a massive fine, and to the mere mortal it is astronomical, to a drug company like GSK, a few billion in fines has always been just the cost of doing business, therefore I suspect they will view their Chinese fine in the same way. Despite being clearly one of the most corrupt and fraudulent international companies in the world, in their home country of Britain, GSK are treated like royalty. They operate above the law because they are the UK cash- cow, they are long established as a major UK corporation, and they even have the backing and support of the UK prime minister, David Cameron, and George Osborne, the UK Chancellor. It will be interesting to see if the downfall of Mark Reilly (and who he might decide to bring down with him) changes that scenario… stay tuned.

For more on GSK, Mark Reilly and China-gate, check out some of these recent posts from award winning blogger, Bob Fiddaman, of Seroxat Sufferers.

This is his latest one:

Wednesday, May 14, 2014

I’m Just a Blogger – Here’s GSK Served on Prawn Crackers

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GSK’s Mark Reilly faces up to 10 years in prison

Thought I’d give my take on GSK and the recent [ahem] bribery scandals in various parts of the world. I say ‘my take’ because it’s something that GSK or their highly paid attorney’s can’t ‘take’ from me. It’s mine and I wish to share it.

So, news today that Chinese officials have charged the former British boss of GSK’s China operations.

And what have they accused him of?

Well, nothing out of the ordinary [by GSK’s standards that is]

Mark Reilly fled China when the going got tough. He later returned, not as a goodwill gesture – he returned because the Chinese police wished to interview him, a result of which saw him arrested then, some months later, charged with offences relating to bribery.

GlaxoSmithKline CEO, Andrew Witty, has kept quiet since his initial statement he made midway through last year. He claimed that neither he or GSK HQ in the UK knew anything about the corrupt practices occurring in their China branch.

So news today that has implicated a British employee who has been charged with corporate bribery, bribing non-government officials and bribing business units should force some kind of statement from Witty. Alas, he remains tight-lipped.

Are we expected to believe that Mark Reilly, upon his initial return to the UK in July 2013, lied to Andrew Witty?

10 days into the investigation and GSK’s head of operations in China, who at this point fled the country, is replaced by someone else. Who smelled the rat, or was this just standard procedure when an employee from GSK is under investigation?

Reilly has enjoyed an illustrious career at GSK. He joined them in 1989, 5 years later, in 1994, he became Finance Director, Discovery Research, WWR&D before moving on to become Assistant Corporate Controller, Corporate Finance, a position that lasted 2 years.

In 1999 he became Vice President Finance UK Pharmaceuticals, this lasted for just over 4 years before he decided to try his hand abroad.

From 2003 to 2006 Reilly was based in Singapore, his title, Vice President Finance, Asia Pacific.

He returned to the UK to take up the position of Senior Vice President, International Finance – this lasted just 2 years before Reilly was, once again, jet-setting.

Between January 2009 – January 2010 he was General Manager, China Pharmaceuticals. In February 2010 he added Hong Kong to his title – thus becoming General Manager, China Pharmaceuticals and HK.

So, where exactly did it go wrong for Reilly?

Was he just a bad egg in a company who have always played things by the book?

Was he the runt of the litter?

Was he just a rogue employee who went off the rails because of a personal greed?

Or is this simply a culture at GSK?

It was early in his career at GSK, 1994, that Reilly was introduced into the world of finance. From that point Reilly seems to have made a very rapid climb up the promotional ladder at GSK.

Reilly has a BSc, Medical Sciences, he has a PhD, Pharmacology/Neurosciences – strangely, between 1987 – 1989 he added an ACA in Business, Finance and Accounting to his list of honours. The ACA qualification is one of the most advanced learning and professional development programmes available.

Safe to assume then that Reilly was no mug.

We can see from a 2010 presentation given by Reilly that a goal of GSK was to gain more sales of its respiratory drugs in China.

In fact page 12 of his presentation pretty much spells it out for us all. [Fig 1]

“Respiratory market is a major opportunity”

Fig 1
 
Let’s look at when news of the Chinese scandal first broke.

According to interviews published by Xinhua, the official state-run news agency, several GSK employees have confessed to bribing doctors with gifts, travel, lecture fees and cash bonuses to persuade them to prescribe more of the company’s drugs.

A man surnamed Li, who is a regional sales manager at GSK China in central China’s Henan Province, said that salespersons at the company received special training on sales skills and methods, especially how to maintain relations with hospitals and doctors, Xinhua reports.

The man, who is in charge of selling respiratory drugs to more than 10 hospitals in the province’s capital city Zhengzhou, added that salespersons established good personal relations with doctors by catering to their pleasures or offering them money, in order to make them prescribe more drugs. [Source]

 “Respiratory market is a major opportunity”

A doctor from a “reputable hospital” whose real name was not given, claimed that one GSK representative had “blatantly offered kickbacks to doctors”.

“For example, 20 yuan [£2.11] for each pack of Seretide, an asthma-treating inhaler; and 10 yuan [£1.05] for each dose of Flixotide, an asthma-treating spray.”

If a doctor appeared reluctant to accept cash, GSK “salespeople” would offer them “gifts, free travel after meetings and lecture fees.”

“In fact, many doctors received lecture fees even when the lectures did not exist,” Xinhua reported. [Source]

Seretide is a drug manufactured and marketed by GSK, a drug used in the treatment of…you’ve guessed it, respiratory problems. It’s also the same drug that Reilly referred to in his 2010 presentation [Fig 1]

“Less than 1m current patients on Seretide”

What better way to increase the number of patients on Seretide than to offer cash incentives to doctor’s who prescribe it!

Putting the Chinese scandal aside for just one moment. Let’s just focus on a BBC Panorama programme that aired a few weeks ago in the UK.

Panorama’s ‘Who’s paying your doctor?‘ saw investigative journalist Shelley Jofre unearth new evidence that Glaxo were pretty much doing the same thing in Poland.

Jarek Wisniewiski, who worked as a sales rep for GSK Poland for eight years told Panorama that in 2010, he worked on a marketing programme across Poland to promoteSeretide. He said that, on paper, money was provided for educating patients about the drug but claims it was, in reality, paying doctors to prescribe more of the medicine. He added…

“I pay for education and in the same meeting I said that I need more prescriptions for Seretide. So … they knew exactly for what I pay.” [Source]

So, how did we get from one illegal promotional push of Seretide in China to another illegal promotional push of Seretide in Poland. The two countries are miles apart.

Was an executive decision made that “We should do as the Chinese do” or was it merely a coincidence that GSK Poland was operating in pretty much the same way as GSK China?

One drug pushed illegally in two different countries and Glaxo’s CEO knew nothing about it?

Back in July 2013 a Glaxo spokesperson claimed that…

“We take all allegations of bribery and corruption seriously. We continuously monitor our businesses to ensure they meet our strict compliance procedures. We have done this in China and found no evidence of bribery or corruption of doctors or government officials.” [Source]

Exactly who is it at GSK that monitor its businesses to ensure they meet their strict compliance procedures?

Why hasn’t this person/persons been hauled over the coals for failing to join the dots with regard to the bribery that was, seemingly rife, in China?

Thing is, and this has been evident throughout the years with GlaxoSmithKline, they are a company – any wrong-doing by an employee is covered up and it’s left to outside investigators to try and find the culprit, the man/woman who ‘pushed the button’, so to speak.

It’s only when the outside investigation pinpoints the ring leaders that we have Glaxo come out and say how shocked they are and that they will do everything in their power to help the investigation.

This is when GSK become transparent, they do so not of their own freewill, they do so because their hand has been forced by the strong arm of the law. However, they do it in such a way that dupes the general public into believing that they have always been as transparent as ever.

Think about it. If GSK were transparent they wouldn’t have had so many lawsuits filed against them. Lawsuits are only filed because GSK initially deny charges brought against them. In law, GSK don’t want to have to admit to anything because it sets a precedence – this is why we see them time and time again settle cases brought against them out of court – when a case is settled they get those who brought the claims against them to sign confidentiality agreements – in essence these agreements state that GSK accept no liability of the charges made against them.

China is a different kettle of fish though. Legal experts are suggesting that GSK’s Mark Reilly could face up to 10 years in prison. Let’s hope it’s not Beijing’s Municipal Prison.

Troy Bremer, an Australian found guilty of fraud, spent a number of years at Beijing’s Municipal Prison. “The officers destroy your body, mind, heart and spirit”, he told theSydney Herald in an exclusive interview back in 2013.

Heaven forbid that Reilly gets sentenced to 10 years in a hell hole such as Beijing’s Municipal Prison. Whatever he’s done it does not warrant such abuse.

Hopefully Reilly will see sense and try to cut a deal. The most obvious ‘Get out of jail card’ he could play would be to name names, to tell the authorities he did what he did because he was told to by senior executives.

I mean, why protect the scum that has left him out to dry?

Bob Fiddaman

 

GSK China Head Executive Could Face Jail Time Over Bribery Offenses…


 

Pack of corrupt, devious, sociopathic criminals the bloody lot of them… 

 

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http://www.theguardian.com/business/2014/may/14/glaxosmithkline-executive-could-face-prison-china-bribery-charges-gsk?utm_source=twitterfeed&utm_medium=twitter

 

GlaxoSmithKline executive could face prison in China over bribery claims

Mark Reilly, who ran GSK’s operations in country, accused along with two other executives of bribing doctors and hospital officials
Chinese police claim GSK, the UK’s largest pharmaceutical firm, offered billions of yuan in bribes in order to boost sales of its products. Photograph: Jason Lee/Reuters

A British GlaxoSmithKline executive has been accused by Chinese police of running “a massive bribery network”, as the corruption scandal at the pharmaceutical group deepens.

Mark Reilly ran GSK’s operations in China but now risks a jail sentence in the country after he was accused of offences that carry a maximum sentence of life in prison.

Chinese police claimed that that Reilly and two other Chinese executives, Zhang Guowei and Zhao Hongyan, bribed doctors and hospital officials. The bribery allegations, which will now be passed to prosecutors, were harsher than many Chinese-based executives expected, Reuters reported.

The police accused GSK, the UK’s largest pharmaceutical company, of offering billions of yuan in bribes to doctors and other hospital staff in order to boost sales of its products. Although Reilly stood down from running GSK’s China operations last July he remains an employee.

A report by the Chinese state news agency Xinhua highlights the role of the Briton. Zhang, a former vice-president of GSK China, told Xinhua that pressure to increase sales led to the bribery. “When Reilly took over the post the company’s strategy shifted from profit-oriented to sales-oriented. The sales target in China was raised every year to compensate the reduction in US and European markets.”

When lurid allegations of doctors being bribed with £320m worth of extravagant gifts and sexual favours first emerged last year GSK said the investigation was focused on Chinese executives rather than British managers.

GSK declined to comment on the specific allegations against Reilly. But in a statement the company said: “We take the allegations that have been raised very seriously. They are deeply concerning to us and contrary to the values of GSK.

“We want to reach a resolution that will enable the company to continue to make an important contribution to the health and welfare of China and its citizens.”

Reilly has been working for GSK since 1989, according to his LinkedIn profile. A graduate of University College London, he holds a PhD in pharmacology and an accountancy qualification. He rose up the GSK ranks, doing a variety of commercial jobs that included stints in Singapore, the USA and GSK’s headquarters in London. He took charge of GSK’s operations in China in January 2009, and was based in Shanghai. He left the country last July when the bribery scandal broke. He later returned and was subsequently barred from leaving. Ten days after the scandal broke Reilly was replaced as GSK’s China boss by Herve Gisserot.

Chinese police have not said whether Reilly has been detained, but officials at the British Consulate in Shanghai have said they are in contact with him and providing assistance.

GSK is also embroiled in a similar scandal in Poland after a whistleblower, Jarek Wisniewiski, told the BBC’s Panorama programme that company representatives paid doctors to boost prescriptions. GSK is also investigating bribery allegations in Jordan and Lebanon.

http://www.fcpablog.com/blog/2014/5/14/chinese-police-charge-former-gsk-china-chief-mark-reilly.html

CHINESE POLICE CHARGE FORMER GSK CHINA CHIEF MARK REILLY

Chinese police Wednesday charged the British former boss of GlaxoSmithKline’s China unit and two other company executives with corruption for bribing health officials and doctors.

A Ministry of Public Security official said in Beijing that Mark Reilly (pictured) and two Chinese executives, Zhang Guowei and Zhao Hongyan, offered bribes to hospital personnel and doctors to boost GSK’s sales.

All three defendants face up to life in prison.

In July last year, China authorities accused GSK, the UK’s biggest pharma, of  paying $482 million in bribes. The Ministry of Public Security said that since 2007 GSK had used 700 travel agencies to deliver the illegal payments.

Police then detained four GSK executives, including Zhang, a GSK human resources director, and Zhao, a legal affairs director.

Reilly had left China when the scandal broke but “voluntarily returned to cooperate with police.” Retuers said.

In October, Xinhua reported that Reilly was in China helping with the investigation and hadn’t been detained.

Reuters said it wasn’t able to contact him Wednesday.

A British consulate spokesperson in Shanghai told Reuters “officials were in regular contact with Reilly and were providing consular assistance.”

Xinhua said GSK’s China revenue was $1.1 billion in 2012, nearly double from when Reilly took over in 2009.

*     *     *

In April, GSK said it was investigating allegations the company hired government-employed doctors and pharmacists in Iraq as paid sales reps for its products.

The pharma also said it is investigating allegations of bribery in Jordan and Lebanon.

In Poland, GSK is facing a criminal probe for allegedly bribing doctors between 2010 and 2012. Prosecutors said last month they have evidence of illegal payments to 13 health centers.

Thirteen people have been charged by Poland’s anti-corruption bureau.

_____________

Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

– See more at: http://www.fcpablog.com/blog/2014/5/14/chinese-police-charge-former-gsk-china-chief-mark-reilly.html#sthash.HD2gF6xt.dpuf

Were The GSK Management Really Unaware, Of One OF The Biggest Bribery Networks In China, Orchestrated By A High Level Employee Of The Company?


And high level management, such as Sir Andrew Witty, GSK’s CEO, were apparently completely unaware of this stuff going on right under their noses?

They were completely oblivious of this massive bribery network involving high level management in China, and hundreds of doctors, drug reps and middle men aiding and abetting them. They were totally unsuspecting that millions of GSK bribe money was being funneled to China in order to fund this network?

And furthermore, when they were exposed and the Chinese began investigating, the GSK officials tried to bribe the Chinese again so that they would keep quiet about the original bribery allegations, and of course top level management abroad were again unconscious that all of this was going on… completely, and innocently, in the dark about the whole thing…

Do you really believe that? 

Seriously? 

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“The investigators also said that while the company itself had been “very responsible and has given us their full support”, the firm’s operation in China “tried to pay bribes” in order to “obstruct” their efforts “in exposing their bribery behaviours”.

Mark Reilly and two other colleagues are also suspected of bribing government officials in Beijing and Shanghai, they said”.

 

 

http://www.bbc.com/news/world-asia-china-27403914

UK executive accused in GlaxoSmithKline China probe

The BBC’s Celia Hatton was granted rare access to a news conference at Chinese police HQ

Related Stories

Chinese police have accused a British GlaxoSmithKline (GSK) executive of ordering staff to bribe hospital officials to use its medical products.

Mark Reilly and two other colleagues are also suspected of bribing government officials in Beijing and Shanghai, they said.

Police have handed the case over to prosecutors, officials said.

GSK said it took the allegations “very seriously” and would co-operate with the authorities over the matter.

Chinese authorities announced in July last year that they were investigating GSK, detaining four Chinese GSK executives.

Polish allegations

The police ministry accused Mr Reilly, the company’s former head of China operations, of personally running a “massive bribery network”.

Analysis

Today’s announcement will be a bitter pill for British Prime Minister David Cameron to swallow, having used his trip to China last year to lobby on Glaxo’s behalf. “Properly standing up for British businesses and British individuals,” he said at the time.

Politics is almost certainly playing its part. The Chinese healthcare industry is rife with corruption – feeding off the desperately low wages of doctors and officials – and no part of it, particularly not the local pharmaceutical supply chain, is exempt.

So Glaxo may well have a case to answer but it may also be a scapegoat. Foreign companies are easy targets in the midst of a crackdown on corruption, and a British one perhaps even more tempting, given China’s fury over David Cameron’s 2012 meeting with the Dalai Lama.

There is no way of knowing how much bearing that may have had of course, but if nothing else, today’s excoriating indictment is a lesson in the limits of British diplomacy in modern day China.

He is alleged to have pressed his sales team to pay doctors, hospital officials and health institutions to use GSK products, resulting in the “illegal revenue” of hundreds of millions of dollars.

At a news conference, the investigators took pains to explain how the cost of the alleged bribes was passed directly on to Chinese consumers, the BBC’s Celia Hatton reports.

They said the cost of the drugs sold by GSK in China was much higher than that of similar drugs sold by the company in other countries – sometimes up to seven times higher.

The investigators also said that while the company itself had been “very responsible and has given us their full support”, the firm’s operation in China “tried to pay bribes” in order to “obstruct” their efforts “in exposing their bribery behaviours”.

Mr Reilly had briefly left China when the investigation was launched last July, but returned to help with the inquiry. A police investigator was believed to still be in China. Mr Reilly could not be reached for comment.

The Chinese operation of GSK was accused by the Chinese authorities, when the probe first began, of using travel agencies and consultancies to transfer bribes over several years.

GSK has already apologised for employees apparently acting outside of its internal controls, but denies the sums of money are anything like as high as those alleged to have been paid.

The pharmaceutical giant is also facing a criminal investigation into similar allegations in Poland.

It follows allegations made by former sales representative Jarek Wisniewski to the BBC’s Panorama programme in April that doctors were paid to promote GSK’s asthma drug Seretide.

If the allegations in either country are proved, GSK may have violated both the UK Bribery Act and the US Foreign Corrupt Practices Act. It is illegal for companies based in the US or UK to bribe government employees abroad.

More on This Story

Related Stories

The GSK China Bribery Scandal Rages On…


http://www.fiercepharma.com/story/telegraph-glaxosmithklines-ex-china-chief-barred-leaving-country/2013-10-16

Telegraph: GlaxoSmithKline’s ex-China chief barred from leaving country

GSK says Mark Reilly staying in China voluntarily to cooperate with bribery probe
October 16, 2013 | By 

GlaxoSmithKline’s former China chief, absent from the country when bribery allegations surfaced this summer, returned in late July to cooperate with investigators. Now, The Telegraph reports that Mark Reilly is no longer on the scene voluntarily. Chinese authorities have barred him from leaving the country, the U.K. newspaper reports.

Glaxo ($GSK) confirms that Reilly met with authorities in Changsha recently “to provide them with information and assistance.” But he hasn’t been confined to the country, much less held in a hotel room as the Telegraph‘s sources suggest. “At no point was he detained,” a spokesman told the newspaper. “Mark remains in China to help further with the investigation should it be required.”

The story the Telegraph‘s sources tell is more dramatic: Reilly was initially barred from international travel before he flew home to London in July. “The police were really angry that Reilly left in the first place,” one of the sources said. “They had put a travel ban on him.”

GSK maintains that Reilly is not and was not subject to an official travel ban. If he had been–or is–he would have had company; Glaxo’s local finance chief, Steve Nechelput, was barred from leaving in July. And with dozens of GSK employees detained–and still in custody months later–confinement to China’s borders seems mild by comparison. GSK has acknowledged that some employees may have breached Chinese law, offering apologies and price cuts in recompense.

As the investigation wears on, The Telegraph notes, families of detained GSK workers have banded together to argue for leniency. Meanwhile, top officials of both countries are on the case: U.K. Chancellor George Osborne is in China now on a mission to improve economic relations, and took the chance to discuss the GSK case with his Chinese counterparts, while Chinese Prime Minister Li Keqiang is personally overseeing the case, the Telegraph says.

A cadre of Chinese higher-ups has been spearheading the investigation, which is just part of a government crackdown on alleged corruption and monopolistic pricing. Multinational drugmakers have borne the brunt of it, with whistleblowers fingering a Big Pharma who’s who, including Eli Lilly ($LLY), Novartis ($NVS), Bayer and Sanofi ($SNY). The probes have spooked doctors and sales reps alike, so the industry’s promotional activities have all but ground to a halt, and companies expect a hit to China sales. We’ll find out just how much as drugmakers unveil their third-quarter results.

– see the story from the Telegraph
– get more from Reuters

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Former GSK China head Mark Reilly remains in China to help graft probe

PUBLISHED : Thursday, 17 October, 2013, 12:00am
UPDATED : Friday, 18 October, 2013, 5:03am

Reuters in London

  • gsk_shanghai.jpg
GlaxoSmithKline’s office in Shanghai. Photo: Reuters

Mark Reilly, GlaxoSmithKline’s former head of operations in China, is helping anti-corruption officials in the country investigating allegations of bribery by the drug maker.

One person familiar with the situation said Reilly had been asked to remain in China while the investigations proceeded and was happy to do so.

Both GSK and the British embassy in Beijing said yesterday Reilly had not been detained.

An embassy spokesman said it was in regular contact with him and was providing consular assistance.

Reilly was replaced as GSK’s China head on July 25 after police accused the drug maker of funnelling up to 3 billion yuan (HK$3.8 billion) to travel agencies to facilitate bribes to doctors and officials.

GSK said at the time that Reilly would continue to help lead its response to the investigation.

“Mark is working closely with the Chinese authorities to conduct a thorough investigation and voluntarily returned to China to help them,” a GSK spokesman said.

“Several weeks ago he met with the Chinese authorities in Changsha to provide them with information and assistance. At no point was he detained. Mark remains in China to help further with the probe should it be required.”

A number of Chinese employees of GSK have been detained, including four senior members of the local management team. But the authorities have not detained any foreign nationals working for the drug maker.

The police allegations against GSK, laid out in detail on July 15, sent shockwaves through the industry and cast doubt over GSK’s ability to ensure compliance standards in fast-growing markets like China.

The crackdown reflects a growing determination by Chinese authorities to stamp out corporate bribery and corruption, which can drive up prices for consumers.

GSK has admitted that some of its Chinese executives appeared to have broken the law and has said it planned to change its business model to lower the cost of medicines in the country.

Several other international drug makers – including Sanofi, Novartis, AstraZeneca, Eli Lilly and Bayer – have also been visited by Chinese officials and the episode has undoubtedly hit sales in the mainland pharmaceutical market.

Analysts at Deutsche Bank said this week that the anti-bribery campaign was likely to last for some time, affecting both multinational and domestic drug companies.

GSK will report third-quarter results on October 23, when the scale of the impact of the affair on its business in China is expected to be revealed.

This article appeared in the South China Morning Post print edition as Former GSK China head helps inquiry

Glaxo’s China chief Mark Reilly faces bribes quiz as he secretly returns to the country


Glaxo’s China chief Mark Reilly faces bribes quiz as he secretly returns to the country

 Read more: http://www.thisismoney.co.uk/money/news/article-2463620/GlaxoSmithKlines-China-chief-Mark-Reilly-faces-bribes-quiz.html#ixzz2hz9cH3da

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The British former head of GlaxoSmithKline’s Chinese operations has secretly returned to the country and is assisting authorities with their bribery investigation.

Mark Reilly left China in July just before police arrested four senior GSK executives amid allegations the firm used more than 700 travel agents to funnel bribes to doctors and medical professionals to boost sales of its drugs.

The 47-year-old Briton continued to work for the firm from its London offices. It yesterday emerged that he has been stuck in China for several weeks, having volunteered to return.

Bribery investigation: Chinese police have blamed the company for orchestrating the alleged paymentsBribery investigation: Chinese police have blamed the company for orchestrating the alleged payments

A GSK spokesman said: ‘Mark is working closely with the Chinese authorities to conduct a thorough investigation, and voluntarily returned to China to help them.

‘Several weeks ago he met with the authorities in Changsha to provide them with information and assistance. At no point was he detained.

‘Mark remains in China to help further with the investigation should it be required.’

Chinese police have blamed the company itself for orchestrating the alleged payments – said to total £321million – and not individual employees.

GSK denies this claim. Chief executive Sir Andrew Witty has, however, admitted that some of his staff may have broken Chinese bribery and corruption laws. 

Among the claims are that GSK used ‘sexual bribery’ – offering prostitutes to doctors to persuade them to prescribe its medicines. Witty described this ‘inappropriate and illegal behaviour’ as ‘shameful’.

The allegations have rocked the pharmaceuticals industry and reflect a new determination by China to crack down on corporate corruption, which can drive up prices for consumers.

Several other international drugmakers, including Sanofi, Novartis, AstraZeneca, Eli Lilly and Bayer, have also been visited by Chinese officials, and the episode has hit sales in the Chinese pharmaceutical market.

GSK is due to report third-quarter earnings next week. Its shares closed flat at 1575p last night.

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Read more: http://www.thisismoney.co.uk/money/news/article-2463620/GlaxoSmithKlines-China-chief-Mark-Reilly-faces-bribes-quiz.html#ixzz2hz9mOd66
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