GSK’s top executive in China caught unaware by bribery charge

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Adam Jourdan and Kazunori Takada Shanghai

GlaxoSmithKline (GSK) executive Mark Reilly had little inkling that he would be charged with leading a network of corruption in China’s pharmaceutical industry, two sources with ties to the businessman and knowledge of the investigation said yesterday.

The allegations against the Briton, who as GSK’s China head was the firm’s legal representative in the country, were the most serious charges ever laid against a foreigner for corporate corruption in China, lawyers said.

Police said they had charged Reilly and two Chinese colleagues with multiple offences on Wednesday after a 10-month probe found the British firm made billions of yuan from schemes to bribe doctors and hospitals.

“The fact that Mark’s name was on the list of people charged was definitely a surprise,” a source with direct knowledge of the investigation said. The source declined to be named because of the sensitivity of the case.

Police findings are usually upheld in Chinese courts, meaning Reilly and the other executives could face decades in jail. GSK’s China-based spokeswoman declined to comment.

Britain’s biggest drug maker said on Wednesday that the allegations were “deeply concerning” and it hoped to “reach a resolution” that would enable it to continue to operate in China, a key growth market for Western pharmaceutical giants.

Reilly, a scientist and accountant who has been with GSK for more than two decades, briefly left China after the scandal broke in July last year. He voluntarily returned to assist authorities with the probe, with insiders saying the understanding was that this would shield him from charges.

“I’ve had regular contact with Mark over the past few months,” an industry executive in China who has personal ties to Reilly said. “I would think this state of affairs is a surprise to him. I don’t think he is prepared or thought that he could be culpable.”

Attempts to reach Reilly were unsuccessful.

The last major corruption scandal to hit a foreign company in China involved mining company Rio Tinto in 2009. The case resulted in four executives, including a Chinese-born Australian, being jailed for between seven and 14 years.

Reilly and two Chinese executives, Zhang Guowei and Zhao Hongyan, are charged with corporate bribery, bribing non-government officials and bribing business units.

Officials gave no specific details on the amount of bribes paid or how much the company had illegally earned, although previously they accused the firm of funnelling up to 3 billion yuan (R5bn) to travel agencies to facilitate bribes to doctors, hospital administrators and officials. – Reuters


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