GlaxoSmithKline confirms receiving sex tapes
The UK’s largest pharmaceutical company GlaxoSmithKline confirms receiving sex tapes of its former head in China, Mark Reilly, and his Chinese girlfriend at his Shanghai apartment. In March, 2013, secretly-filmed intimate video footage had been emailed to a number of Glaxo senior executives, including CEO Sir Andrew Witty.
GlaxoSmithKline (GSK), which says it is cooperating with Chinese authorities, said in a statement “The issues relating to our China business are very difficult and complicated.”
Chinese authorities have accused Mr. Reilly of telling his sales representatives to bribe hospital officials to use GSK medications.
According to the Telegraph, Mr. Reilly was authorized by GSK to spend £20,000 ($34,000) of the firm’s money to hire Peter Humphrey, a private investigator, to find out who had carried out the secret filming, “believed to be part of wider attempts to expose the drugs giant to punitive action by Chinese authorities.”
Sex tape sparked Chinese probe
The investigation never found out who had placed the camera in Mr. Reilly’s bedroom. After his enquiries led to a Chinese businesswoman he suspected of a smear campaign against Glaxo, Mr. Humphrey ended up in prison, says the Sunday Times. Official Chinese media said Humphrey and his wife had gathered large amounts of personal data on Chinese citizens illegally. They are both still in custody.
Mr. Humphrey’s activities prompted Chinese authorities to order an inquiry into corruption that damaged the drugmaker’s business in the country.
The probe has affected GlaxoSmithKline’s sales in China. In the wake of the bribery scandal, GSK sales in China dropped 61% in Q3 2013.
In July last year, police in China accused GSK of transferring up to 3 billion yuan (£282 million, $480 million) via a network of over 700 travel agencies to bribe hospital officials and doctors.
While acknowledging the existence of the tape, GSK does not explain how it relates to the alleged corruption scandal.
Mr. Reilly charged with corruption
Mr. Reilly, who is not allowed to leave China, may face a long prison sentence after Chinese police charged him with corruption in June 2014.
Chinese probes into the activities of GSK and a number of other multinational pharmaceutical companies have alarmed foreign executives in the country, says Reuters. Many of them have consulted lawyers to decide whether they should leave the country temporarily.
Will there be any more?
GSK facing corruption scandals worldwide
GSK, based in Brentford, London, is currently the target of corruption investigations around the world, including the UK.
- United Kingdom: the Serious Fraud Office (SFO) announced in May that it had launched a formal criminal investigation into GSK’s commercial activities. The SFO invited whistleblowers to come forward.
- Lebanon and Jordan: GSK said in April that it had initiated an investigation in Lebanon and Jordan into “a small number of people”.
- Poland: A BBC show revealed that in April, 11 doctors and a GSK regional manager in Poland were facing corruption charges. Former employees were alleged to have paid money to promote the COPD and asthma medication Seretide (in North America known as Advair).
- Iraq: At the beginning of April, GSK said a probe was underway into accusations that it had hired 16 state-employed pharmacists and doctors as paid sales representative. GSK’s head office was sent emails by somebody who was familiar with its Middle East operations reporting illegal activities.