Tagged: Scandal

Peter Humphrey (Freed Investigator In GSK China Corruption Scandal) Speaks Out..


http://www.bbc.com/news/world-asia-china-33490446

Investigator Peter Humphrey warns over GSK China ordeal

  • 1 hour ago
  • From the section China
Peter Humphrey: “We are pursuing justice not revenge.”

It’s exactly two years since the door of Peter Humphrey’s Shanghai bedroom was kicked in by police and he disappeared into a prison nightmare which ended only three weeks ago with his deportation from China.

In an exclusive interview with the BBC, the British corporate investigator who became embroiled in GlaxoSmithKline’s (GSK) China corruption scandal tells me his story is “a cautionary tale which many people can learn from”.

The risks of doing business in China, he says, are “on the same scale as the opportunities”, and governments, including the British government, “have not been doing a very thorough job of making business understand the risks”.

“Absolutely any company going to China could be the next party to suffer our fate if they fail to understand this,” he says.

The fate suffered by Peter Humphrey and his wife Yu Yingzeng was to spend two years in squalid and crowded jail cells, to be denied urgent medical attention and to be separated from each other and from their son. The corporate investigator says it was both a shattering experience and a miscarriage of justice.

“None of our staff did anything illegal,” he told me. “We engaged third parties to help us with some parts of our work. We always instructed them to follow legal means but had no control over the methods they used.”

So why the prosecution and the prison term?

“It doesn’t stack up at all when you analyse our case and the GSK case on the basis of the information you have. It doesn’t stack up at all.”

Peter Humphrey was convicted in 2014

The couple were corporate investigators who became embroiled in a Chinese police investigation of corruption at GSK. The British pharmaceuticals giant had bribed Chinese doctors and hospitals to buy its medicines.

Mr Humphrey and his wife were in no way implicated in that corruption, but had been hired by the company to investigate the source of a secretly filmed sex video of GSK’s top boss in China and of whistleblower emails sent to company headquarters in London.

“I believe we were collateral damage in a wider dispute between a company and the authorities which led to us being dragged in,” he said.

Even now, Peter Humphrey is reluctant to discuss the details of the GSK case or of his relationship with his former client. Asked why, he tells me:It’s not impossible that we may sue some of these parties or through other means try to seek redress.”

Corruption crackdown

He says he watched the TV coverage of the GSK trial from his Shanghai prison cell. The company was found guilty of systematic bribery and fined £300m. He was shocked by the contrast between his punishment and theirs.

“Suspended jail sentences for three or four of the main culprits when I and my wife had been sentenced to years in prison,” he says.

“Someone asked me recently why someone like Mark Reilly (GSK China’s boss) could be set free and we were in jail. I think it’s very simple, we don’t have half a billion dollars. That story was about money from the beginning. Money got them into trouble and money got him out.”

The events which led to these trials took place in the early part of 2013 when China’s new President Xi Jinping had just declared nationwide campaigns against corruption and for the rule of law.

Peter Humphrey says that at the time he welcomed these developments: “We felt hopeful that a new era with a genuine crackdown against corruption, had arrived.

“What we were doing for companies in the private sector was very similar to what the government now seemed to be doing in the public sector. Unfortunately though, when such a crackdown is driven in a sort of campaign style, throughout China’s history in the past 60 or 70 years, we have seen that campaigns are often taken advantage of and used to conduct personal vendettas and I think that’s what happened to us. Someone took offence and then orchestrated an act of personal revenge.”

Peter Humphrey and Yu Yingzeng said they had backed the crackdown on corruption

Having been deported from China, Peter Humphrey does not know whether he’ll ever be able to go back. His two years in prison do not erase his 40 year affection for the country.

“I love China. I love the Chinese people I’ve known over the years. I’ve had many positive memories and experiences. This does not erase them,” he says.

But once the investigator, always the investigator. From a world away in south-east England, Peter Humphrey needs to focus first on getting the medical treatment that he was denied in prison. But he is also determined to work out exactly what triggered his two year nightmare in Shanghai.

“I and my wife are not vengeful people. But we are angry because an injustice occurred. We are pursuing justice not revenge,” he adds.

How the case unfolded:

  • January 2013: Email alleging bribery sent to GSK boss, followed in March by sex tape featuring China chief Mark Reilly
  • April 2013: Peter Humphrey’s company ChinaWhys by GSK hired to investigate
  • June 2013: Mr Humphrey delivers his report to GSK
  • July 2013: China announces investigation into GSK China, police detain four Chinese GSK employees
  • August 2013: Mr Humphrey and his wife arrested for allegedly buying and selling personal information
  • May 2014: Chinese authorities accuse Mr Reilly of overseeing bribery network
  • August 2014: Mr Humphrey and his wife go on trial and are convicted
  • June 2015: Peter Humphrey and Yu Yingzeng are freed early from prison
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GSK China Scandal: GSK (Scapegoat) Peter Humphrey Speaks…


http://www.theguardian.com/world/2015/jun/18/china-gsk-peter-humphrey-prostate-problems-confession-claim

Chinese officials used prostate problems to get ‘confession’, says ex-GSK sleuth

Peter Humphrey, who was jailed in Shanghai for illegally obtaining information on Chinese citizens, says authorities ‘held his health hostage’

Peter Humphrey (L) and his wife Yu Yingzeng as they leave court in August 2014.
Peter Humphrey and his wife Yu Yingzeng as they leave court in August 2014. Photograph: Aly Song/Reuters

Chinese authorities told a jailed British investigator he had problems with his prostate but withheld diagnosis for months to pressure him to confess, he has said after his release.

Peter Humphrey said his health was “held hostage” after he and his wife Yu Yingzeng, a naturalised US citizen, were detained in 2013. They had become embroiled in the fallout from a GlaxoSmithKline corruption scandal that their company was originally hired to investigate.

“Prison officers deliberately obstructed my access to appropriate medical attention, for my prostate and other health problems,” Humphrey told the Guardian, adding that at times during his imprisonment he was handcuffed and held in a metal cage.

“Every week in captivity I raised requests for next-step procedures. I was always refused on the grounds that I had not signed an admission of crime.”

He was told he had a prostate problem after a checkup when he was first taken into detention, but only got a diagnosis on 28 April this year, according to a family friend. Yu also needs medical treatment for kidney problems, although it was not clear if she had also been denied access to doctors.

The couple were found guilty of illegally obtaining 256 items of information on Chinese citizens, including IDs, mobile phone numbers and travel records, after a one-day trial last August. Although officially an open prosecution, only relatives and consular officials were allowed into court for what was widely seen as a politically driven case.

Humphrey was sentenced to two and a half years in jail and fined 200,000 yuan (£20,260). His wife was sentenced to two years and fined 150,000 yuan. They were released early on medical grounds.

The pair’s sentences appeared to be unusual compared to previous ones, said Prof Don Clarke, a specialist in Chinese Law at George Washington University, in a posting on China Law Prof blog.

Shanghai court records for 20 earlier prosecutions for trafficking private data showed that at least two people convicted of selling millions of pieces of information got only a suspended sentence and a small fine, he wrote. In one of the lowest volume comparable cases, where 4,619 pieces of information had been sold, the defendant was given only a 3,000 yuan fine.

“At the very least, I think the burden is now on those who would assert that this case is not an outlier and possibly a case of selective prosecution,” Clarke wrote, caveating that his assessment was based on preliminary information.

The couple’s arrests sent chills through the foreign business community in China, as Humphrey and his wife were experienced and respected corporate investigators. He had been a Reuters foreign correspondent for nearly two decades and Yu was an accountant before they founded their company ChinaWhys in 2003.

GSK had hired them to investigate why the company’s then head of China operations, Mark Reilly, had been surreptitiously filmed having sex with his Chinese girlfriend in his guarded luxury home, a video sent to the company along with a slew of corruption allegations.

As the investigation continued, however, Humphrey began to suspect that the accusations of fraud might be true. In the summer of 2013, authorities raided the GSK office, confiscating documents and detaining employees. Over six years, they said, GSK may have spent £285m on bribing doctors and hospital officials to sell its drugs.

Weeks later investigators targeted ChinaWhys, but the drugmaker has kept Humphrey and Yu at arm’s length. GSK says the charges against Yu and Humphrey may not be related to GSK, and Chinese state media have never explicitly made the link.

Throughout the fiasco, one figure has lurked in the background: Vivian Shi, GSK’s former government relations manager. Reilly suspected she was the whistleblower, although she has denied it. Shi spent four years at the company, but left in December 2012, shortly before GSK executives began receiving the emails. She is supposedly well-connected in public security, and her father was a senior communist in Shanghai. Humphrey was jailed soon after she learned of the investigation.

Shortly after Humphrey’s detention, a video of him apparently “confessing” in a police station, was broadcast on national TV, an extremely unusual treatment of a foreigner. Humphrey said that despite the televised statement he had always refused to plead guilty in court to the offences he was charged with, frustrating his captors.

“Neither I nor Ying have ever admitted any guilt as charged. We were not guilty of the offences with which we were charged and convicted, but my health was held hostage to signing such a confession. I never signed an admission of crime,” Humphrey said in response to Guardian questions that were passed on to him by a family friend.

The couple are now seeking medical attention as soon as possible and are trying to piece their lives back together after nearly two years behind bars, with limited communication with the outside world and in cells so cramped and overcrowded they sometimes had to sleep on the ground.

“I’m very happy to finally get out of captivity,” Humphrey said. “We have been absolutely shattered by what happened. It will take time to pick up the broken pieces.”

Former GSK Senior Exec, Chris Viehbacher, Embroiled In Scandal At Sanofi (2014)


http://www.cnbc.com/id/102235774?

Bad medicine: Suit claims ‘kickback’ scheme at Sanofi

Wednesday, 3 Dec 2014 | 3:27 PM ET

12

COMMENTSJoin the Discussion

A new lawsuit claims the recently ousted CEO of Sanofi and other executives at the huge drugmaker conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold.

The whistleblower lawsuit also claims Sanofi CEO Christopher Viehbacher was fired by the company’s board in October “in part, because Defendant Viehbacher was involved in the aforesaid illegal and/or fraudulent activity,” which allegedly went on “over the course of many years.”

Ousted Sanofi CEO Christopher Viehbacher

Eric Piermont | Getty Images
Ousted Sanofi CEO Christopher Viehbacher

The suit filed Wednesday says that Sanofi used contracts that appeared to be for legitimate purposes to direct money to hospitals, doctors and retail pharmacy chains to induce them to purchase and prescribe Sanofi’s diabetes medication. It also claims that “approximately $1 billion is missing from Defendant Sanofi which has not been accounted for.”

Sanofi itself in October cited poor relations between Viehbacher and the board as the reason he was sacked.

Read MoreSanofi ousts CEO after warning on diabetes business

The bombshell new kickback allegations by a Sanofi paralegal named DianePonte—who herself was fired in September after allegedly suffering retaliation for bringing the scheme to light—come two years after the drug company reached an agreement with the Justice Department and several states to pay $109 million to settle claims that it engaged in kickbacks by giving doctors free samples of an arthritis drug as a way to encourage them to buy and prescribe that medication.

Such kickbacks are illegal because they can encourage the prescription of drugs that are covered by federal Medicare and Medicaid insurance programs, and thus have taxpayers foot the bills for medication that might otherwise not have been prescribed.

After that 2012 settlement, Sanofi also had a corporate integrity agreement with the Health and Human Services Department requiring the company to abide by federal health-care laws and to report illegal activities by the company and its employees, Ponte’s suit said. However, a check of HHS’ database of such integrity agreements indicated that pact had not been executed as of yet.

Sanofi on Wednesday indicated it had not yet been served with Ponte’s lawsuit, but in a statement said, “Sanofi does not comment on litigation.”

On Thursday, after reviewing the suit, Sanofi issued a new statement, which said: “Diane Ponte is a disgruntled former employee who is opportunistically attacking our company. Ponte filed for violations of New Jersey state employment law, specifically the New Jersey Conscientious Employee Protection Act (‘CEPA’).”

“The employment law allegations are without merit, and Sanofi will vigorously defend the suit. We take this matter very seriously and will protect our company and our reputation,” Sanofi said.

Ponte’s suit, filed in New Jersey Superior Court in Newark, names as defendants Sanofi, Viehbacher, Sanofi General Counsel Robert DeBerardine and other executives, including Sanofi’s former vice president of its U.S. diabetes business, Dennis Urbaniak, and the ex-assistant vice president of special projects, Raymond Godleski.

“It’s shocking that these people got away with this for so long and then fired this woman for uncovering their wrongdoing,” said Rosemarie Arnold, lawyer for the 53-year-old Ponte. “She was blatantly fired as a result of her whistleblowing activity.”

Hostile work environment alleged

The suit says Sanofi and its managers created a hostile work environment for Ponte after she made her allegations of wrongdoing and created a pretext for her dismissal in September.

The suit said Ponte became aware of the alleged diabetes drug scheme in March 2013, when she received electronic requests for her approval of nine Sanofi contracts worth a total of $34 million—seven contracts with the consulting firm Accenture, and two with the professional services firm Deloitte. Ponte, a 13-year Sanofi veteran, at the time was working in the company’s U.S.headquarters in Bridgewater, New Jersey, in the contracts group, where she was responsible for reviewing contracts.


Views from the cafe-pharma GSK board below:

http://www.cafepharma.com/boards/showthread.php?t=571394

GlaxoSmithKline Anonymous board for GlaxoSmithKline

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#1
Old 12-04-2014, 10:44 PM
Anonymous

Posts: n/a
Default Viehbacher may not be GSK’s White Knight
If there is any truth to these allegations, Viehbacher may not be as available as he seems:

“A new lawsuit claims the recently ousted CEO of Sanofi and other executives at the huge drugmaker conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold.”
http://www.cnbc.com/id/102235774?

#2
Old 12-05-2014, 06:53 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Interesting post. If true, CV is yet another executive fraudster among a growing list.
Reply With Quote
#3
Old 12-05-2014, 06:58 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
[quote=Anonymous;5289428]If there is any truth to these allegations, Viehbacher may not be as available as he seems:

“A new lawsuit claims the recently ousted CEO of Sanofi and other executives at the huge drugmaker conducted a scheme in violation of federal law to funnel tens of millions of dollars in kickbacks and other incentives to get the company’s diabetes drugs prescribed and sold.”
http://www.cnbc.com/id/102235774?%5B/QUO

This is from one disgruntled employee. Go back to re posting something useful
Reply With Quote
#4
Old 12-05-2014, 08:51 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Disgruntled does not necessarily mean wrong. The 2 guys from GSK who were whistleblowers were disgruntled as well, but they weren’t wrong.

Let the courts decide.
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#5
Old 12-05-2014, 08:17 PM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
She also claims about $1 billion is missing! That part should be proved/disproved fairly quickly. This isn’t the Pentagon, Sanofi’s accountants must have records somewhere.
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#6
Old 12-11-2014, 08:12 PM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
We could use the $ 1b
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#7
Old 12-12-2014, 05:26 PM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
“White Knight?!” You racist
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#8
Old 12-13-2014, 05:26 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Vie archer is impressive his lack of a morale code have now started a path of destruction at 2 companies.
http://www.bloomberg.com/news/2014-1…-baseless.html
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#9
Old 12-13-2014, 09:24 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Transparency. Respect for People. Integrity. Patient Focused. Maybe not.
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#10
Old 12-13-2014, 01:54 PM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Quote:
Originally Posted by Anonymous View Post
Transparency. Respect for People. Integrity. Patient Focused. Maybe not.
This guy was hip deep in the fraud at GSK TOO. Just look at the Lauren Stevens trial transcripts and you will know. He belongs in Prison.

#11
Old 12-13-2014, 02:04 PM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Ultimately he is as responsible for PF as anyone else.
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#12
Old 12-14-2014, 08:39 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Just keeps getting better
Sanofi Is Accused of Using Kickbacks to Encourage Prescribing Diabetes Drugs

According to the complaint, on October 29, 2014, shares of Sanofi fell $2.85 or almost 6% to close at $45.22 on the news of the termination of Chief Executive Officer, Christopher A. Viehbacher. On December 3, 2014, it was reported by various media outlets that a whistleblower lawsuit had been filed by a former Sanofi paralegal. This suit alleges that Viehbacher, along with other executives, violated federal law by funneling tens of millions of dollars in kickbacks and incentives to get the company’s diabetes drugs prescribed and sold. This lawsuit also alleges that Viehbacher was dismissed due to his involvement in the illegal activities, such as kickbacks and incentives, which went on for many years.

The complaint also alleges that Sanofi: (i) was making improper payments to healthcare professionals in connection with the sale of pharmaceutical products in violation of federal law; (ii) lacked adequate internal controls over financial reporting; and (iii) as a result, the company’s public statements were materially false and misleading at all relevant times.
Reply With Quote
#13
Old 12-15-2014, 11:46 AM
Anonymous

Posts: n/a
Default Re: Viehbacher may not be GSK’s White Knight
Quote:
Originally Posted by Anonymous View Post
Just keeps getting better
Sanofi Is Accused of Using Kickbacks to Encourage Prescribing Diabetes Drugs

According to the complaint, on October 29, 2014, shares of Sanofi fell $2.85 or almost 6% to close at $45.22 on the news of the termination of Chief Executive Officer, Christopher A. Viehbacher. On December 3, 2014, it was reported by various media outlets that a whistleblower lawsuit had been filed by a former Sanofi paralegal. This suit alleges that Viehbacher, along with other executives, violated federal law by funneling tens of millions of dollars in kickbacks and incentives to get the company’s diabetes drugs prescribed and sold. This lawsuit also alleges that Viehbacher was dismissed due to his involvement in the illegal activities, such as kickbacks and incentives, which went on for many years.

The complaint also alleges that Sanofi: (i) was making improper payments to healthcare professionals in connection with the sale of pharmaceutical products in violation of federal law; (ii) lacked adequate internal controls over financial reporting; and (iii) as a result, the company’s public statements were materially false and misleading at all relevant times.
who cares, go to the Sanofi thread. we have enough problems with our own leadership

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”.

“You can’t put a company in jail and they want someone in jail. They want Mr. Reilly in jail for about 10 years. That’s what they’re looking to do”…


It will be interesting to see if these GSK executives are put in jail for the bribery charges they are accused of… would that be a first for white collar GSK corporate crime? Or perhaps the UK government will intervene (again) and cut a deal with the Chinese authorities? 


 

 

http://chinadigitaltimes.net/2014/05/china-charges-british-former-gsk-boss-bribery/

Kenneth Jarrett, president of the American Chamber of Commerce Shanghai, said he was surprised at the “strong response” from the police.

“I would agree that it’s not what I would have expected because it seemed like GSK were cooperating very closely with the authorities,” he told Reuters.

[…] China is a key growth market for large drugmakers, which are counting on its swelling middle class to offset declining sales in Western countries. China is set to be the second-biggest pharmaceuticals market behind the United States within three years, according to consultants IMS Health.

[…] “Later they could bring an action against the company and seek penalties against the company and I wouldn’t be surprised if they did that actually, because the claim is so egregious that the company could be charged and fined,” said Steven Dickinson, Qingdao-based partner with law firm Harris Moure.

“But the thing is you can’t put a company in jail and they want someone in jail. They want Mr. Reilly in jail for about 10 years. That’s what they’re looking to do,” he added. 


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China Unveiling GlaxoSmithKline Bribery Investigation Details On 14th of May


    China Unveiling GlaxoSmithKline Bribery Investigation Details

China Unveiling GlaxoSmithKline Bribery Investigation DetailsReuters

Chinese authorities will unveil the latest developments related to their GlaxoSmithKline investigation after the Ministry of Public Security accused Asia-based executives at Britain’s largest drugmaker of bribery.

According to a Ministry of Public Security statement, China’s authorities will reveal to the media at on 14 May their findings after a probe into GSK following allegations that unnamed executives routed 3bn yuan ($488m, £307m, €365m) in bribes to doctors through 700 travel agencies and consultancies over six years.

In July 2013, Chinese police arrested four GSK executives in connection with the bribery allegations.

On 30 April, GSK said: “The People’s Republic of China (PRC), acting through various government agencies, continues its investigation into alleged crimes and violations of law by GSK’s China operations.

“The Group takes these allegations seriously and is continuing to cooperate fully with the Chinese authorities in this investigation. The Group has informed the US Department of Justice, the US Securities and Exchange Commission and the UK Serious Fraud Office (SFO) regarding the investigation and is co-operating fully with these agencies.

“It is not possible at this time to make a reliable estimate of the financial effect, if any, that could result from these matters.”

GSK has also admitted that some Chinese executives appeared to have broken the law, but CEO Andrew Witty said the head office had no prior knowledge about the wrongdoing.

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

Read more: Telegraph: GlaxoSmithKline’s ex-China chief barred from leaving country – FiercePharma http://www.fiercepharma.com/story/telegraph-glaxosmithklines-ex-china-chief-barred-leaving-country/2013-10-16#ixzz2iJecGZuM
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http://www.scmp.com/news/china/article/1333239/former-gsk-china-head-mark-reilly-remains-china-help-graft-probe

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

Bob Fiddaman on “Andrew Witty and GSK China Scandal”


http://fiddaman.blogspot.ie/2013/08/andrew-witty-i-know-narrrrrrrrthing.html

Monday, August 26, 2013

Andrew Witty… I know narrrrrrrrthing

Like a script from the 70’s classic Fawlty Towers, GSK Head, Andrew Witty, has recently claimedthat GSK HQ in London knew nothing about the fraud occurring in China [back stories herehere,here]

If Witty is telling the truth one has to ask why he knew nothing. He’s the head of the company and surely this means keeping his fingers on the pulse at GSK, both at home and globally.

Witty, who last year, blamed Glaxo’s history of fraudulent promotion on “part of an era”, is, in essence, deflecting blame on his own poor performance as a Chief Executive.

Glaxo were found guilty and fined a record breaking $3 billion for that particular crime and Witty spun his company’s dirty deeds by blaming an era that he, allegedly, had nothing to do with. So, he was, it can be argued, blaming his predecessor Jean Pierre Garnier.

Nothing changes. Now, it appears, Witty is, once again, deflecting blame.

Digging through the archives we can see that this isn’t the first time Glaxo have been embroiled in controversy regarding payments made to doctors.

In 2003, admittedly before Witty was in charge, the Finance Police in Veneto, Italy, charged 72 Italian doctors and Glaxo employees with bribery and corruption, charging that Glaxo employees showered cash, gifts and trips on doctors to encourage them to prescribe more Glaxo products. [1]

Déjà vu anyone?

Just like the Chinese allegations Glaxo were accused back in 2003 of wining and dining doctors and sending them on lavish trips in an effort to get them to prescribe more of it’s products.

How did Glaxo’s then medical director, Giuseppe Recchia, react to news of the illegal activities?

“We think we acted according to the standards fixed by the law.”

Marvelous isn’t it.

During the 2003 investigation it was learned that 26 chiefs and assistant chiefs of hospital departments, five university professors, and four heads of hospital pharmacies were invited to “medical tours” to places such as Monte Carlo in the days of the Formula 1 Grand Prix or to Sharm el Sheik or Damascus, or they received tens of thousands of pounds cash with fictitious justifications.

The current Chinese investigation alleges pretty much the same although we can throw prostitution into the pot as well.

I wonder if Witty’s predecessor knew nothing about what was going on in Italy – that seems to be the standard these days. Run a large corporate company, cover oneself in garlands with praise received, deny any knowledge of any wrong-doing when criticism is aimed and fired.

Witty claims that London HQ had no knowledge of what was going on in China. His London HQ have known for years that thousands of people have found Seroxat withdrawal problematic… they still did nothing to help these consumers.

If Witty had any gumption about him, if he really wanted to practice what he preached then maybe it’s time for him to sit down with Seroxat victims, maybe he could write directly to Secure Law, the UK law firm representing claimants who became addicted to Glaxo’s wonder pill.

Then again, I’m guessing even Witty would find it difficult to face victims or even their representatives… he’d have to get past his own lawyers first who would gently advise him that meeting with Seroxat victims/representatives would be an admission of guilt… and we can’t have GSK looking guilty can we?

What happened in China “I know nothing”

What happened in Italy? I know nothing”

Ignorance is bliss eh.

This one’s for you Mr Witty.

[1] Italians Link Glaxo to Illegal Doctor Gifts

Bob Fiddaman

GSK’s China crisis: chief executive Andrew Witty speaks – as it happened


http://www.guardian.co.uk/business/2013/jul/24/gsk-china-crisis-ceo-andrew-witty-live

GSK’s China crisis: chief executive Andrew Witty speaks – as it happened

Sir Andrew Witty, chief executive of GlaxoSmithKline, speaks publicly for the first time about the cash and sexual bribery scandal that has led to the arrest of four senior executives

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Sir Andrew Witty, Chief executive of GlaxoSmithKline.
Sir Andrew Witty, chief executive of GlaxoSmithKline. Photograph: Linda Nylind

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11.36am BST

Questions Witty must answer

Britain’s biggest drug company has admitted some of its executives have broken the law, but has failed to explain who did it, what they did, when they did it or how long the company has known about it.

Follow our live coverage of his statement (midday) and conference call with the media (from 12:15pm).

Here are eight questions I think Witty – who was paid £3.9m last year – should answer.

11.46am BST

Eight questions for Witty

What have GSK staff actually done?

The Chinese authorities have accused GSK of acting like a criminal “godfather”, using a network of 700 middlemen and travel agencies to bribe doctors with £320m cash and sexual favours in return for prescribing GSK drugs.

How long have GSK China executives been allegedly breaking the law?

Gao said the police have evidence that bribery has been a “core part” of GSK China’s business model since 2007.

How much did GSK pay out in bribes? Did this inflate the price of GSK’s drugs to patients?

Gao claims GSK spent 3bn yuan (£320m) on bribes. GSK has refused to comment.

When did GSK first become aware of these allegations and why did Witty not address accusations of wrongdoing in China earlier?

The Chinese authorities announced the charges and arrested the four GSK executives on 15 July – this was just a week after the company said a four-month internal investigation found “no evidence of corruption or bribery in our China business”.

How far up the corporate food chain did the corruption reach?

GSK has refused to say how many of its executives appear to have breached Chinese laws, or name any individuals it suspects.

What will Witty do to clean up GSK’s Chinese operations?

GSK said it is taking the charges “extremely seriously” and will take “all necessary actions to … root out corruption wherever it exists”, but the company has not so far given any details of specific measures it will take.

What information has GSK passed to the Serious Fraud Office?

GSK said it is regularly briefing the SFO, but has not said what information it has passed on.

Can Witty assure shareholders that staff in other countries are not bribing doctors?

Last year GSK paid a $3bn (£1.9bn) fine in the US to settle claims that it tricked and bribed doctors into prescribing dangerous antidepressants to children. After the settlement Witty vowed that a company-wide overhaul would prevent a repeat of the scandal.

Updated at 11.57am BST

11.55am BST

China says probe to widen to other drug companies

In the latest development China’s official news agency has today hinted that more foreign and local drug companies could soon be implicated in the “rampant” bribery scandal. More on Reuters.

It will not be surprising if more pharmaceutical companies and hospitals, domestic or international, are to be involved in probes in the days to come. Big international firms should shoulder (their) due responsibilities to bid farewell to malpractice, setting a good example and serving as a wake-up call for domestic pharmaceutical companies.

Updated at 11.55am BST

12.12pm BST

Witty: China scandal will impact GSK’s performance

Witty’s only comment on the China scandal in the company’s half-year results is:

Clearly, we are likely to see some impact to our performance in China as a result of the current investigation, but it is too early to quantify the extent of this. We are co-operating fully with the Chinese authorities in this matter.

12.20pm BST

GSK sales up 2%

GSK’s sales in second quarter are up 2% to £6.6bn. Earnings per share were up 1%. the company expects to sell Lucozade and Ribena before the end of the year.

Updated at 12.36pm BST

12.22pm BST

Witty: allegations are “shameful” and “deeply disappointing”

Witty said the allegations in China are “shameful” and “deeply disappointing”.

To be crystal clear we have zero tolerance to this sort of behaviour.

12.25pm BST

Witty: GSK is “cooperating fully with the authorities”

Witty said the allegations are “totally contrary to our values”, and says the company is “cooperating fully with the authorities”.

12.27pm BST

Witty: Investigation focuses on Chinese managers, not British executives

It [the Chinese investigation] appears to be focused on a number of senior managers, potentially defrauding GSK and doing something inappropriate and illegal

Witty says there is nothing to indicate that the British management of GSK China had any role in the scandal or any knowledge of the activities of other individuals.

12.29pm BST

Witty says this investigation is “quite different” to the whistleblower claims the company recently investigated and found no evidence of wrongdoing.

12.32pm BST

Witty: UK headquarters “knew nothing” of China fraud

I am personally very disappointed. They are shameful allegations.

I remain strongly of the view that the 99.9% of individuals in this organisation are operating in the right way.

12.39pm BST

Witty: I’m “absolutely willing and ready” to go to China

Witty says he’s “absolutely willing and ready” to go to China, but says there are a lot of other issues in GSK that require his attention.

He declined to say if he would hand back some of his bonus this year if the company is found guilty of fraud in China.

12.51pm BST

Witty: GSK is cooperating with regulators in the UK and US

Witty says GSK has “opened up channels” to regulators on both sides of the Atlantic. He says the company has also “consulted with the UK government”.

12.53pm BST

Witty repeats his “absolute” commitment to “rooting out” corruption

Despite a number of journalists still requesting to ask questions, Witty said he had “run out of time” after 30 minutes of questions and closed the conference call by repeating his “absolute” commitment to “rooting out corruption”.

1.58pm BST

Witty’s answers to the Guardian’s questions

Witty ended the conference call before allowing me to put the Guardian’s eight questions to him. I have collated the best we learned from his other answers.

What have GSK staff actually done?

“It [the Chinese investigation] appears to be focused on a number of senior managers, potentially defrauding GSK and doing something inappropriate and illegal.”

He said the allegations were “shameful” and “deeply disappointing”. “To be crystal clear we have zero tolerance to this sort of behaviour,” he said.

But he refused to explain what exactly the executives have been doing. He said the investigation was in the early stages, and he was unable to provide any further details.

How long have GSK China executives been allegedly breaking the law?

Witty did not answer this question.

How much did GSK pay out in bribes? Did this inflate the price of GSK’s drugs to patients?

He did not answer this question. But he raised the possibility of discounting the price of drugs in China.

When did GSK first become aware of these allegations and why did Witty not address accusations of wrongdoing in China earlier?

Witty said GSK’s head office in London “knew nothing” of the fraud allegations until they were announced by the Chinese police last week.

He stressed that the current investigation is “quite different” to a whistleblower’s claims of corruption GSK investigated recently and said it found “no evidence of corruption or bribery in our China business”.

He did not explain why the previous four-month internal investigation did not discover the current allegations.

How far up the corporate food chain did the corruption reach?

Witty said the Chinese police’s investigation appeared to focus on the four Chinese GSK executives already detained, and he said there was nothing to indicate that GSK China’s British management – Mark Reilly and Steve Nechelput – had any knowledge of the wrongdoings. 

What will Witty do to clean up GSK’s Chinese operations?

Witty said GSK is “cooperating fully with the authorities” and was absolutely committed to rooting out corruption. He said GSK would carry out a full review of its Chinese operations and processes.

He said he was “absolutely willing and ready” to go to China, but said he has no plans to go yet.

What information has GSK passed to the Serious Fraud Office?

He did not state what information has been exchanged. But said GSK has “opened up channels” to regulators on both sides of the Atlantic. And the company has also “consulted with the UK government”.

Can Witty assure shareholders that staff in other countries are not bribing doctors?

He said he was “personally very disappointed” by the “shameful allegations”, but said he remains “strongly of the view that the 99.9% of individuals in this organisation are operating in the right way”.

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