1 Boring Old Man

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

Daily Mail

By Hugo Gye

29 June 2014

A covert sex tape involving a senior executive and his Chinese lover was the trigger for a major investigation into corruption at British drugs giant GlaxoSmith-Kline, it was revealed yesterday. The video of married Mark Reilly and his girlfriend was filmed by secret camera and emailed anonymously to board members of the pharmaceutical firm. It led to an investigation that has rocked the £76billion company – which stands accused of bribing doctors and other health officials in China with £320million of gifts, including sexual favours from prostitutes, to persuade them to prescribe its drugs.

Mr Reilly, who ran the company’s Chinese business, was charged six weeks ago with running a ‘massive bribery network’ involving £90million of illegal sales and banned from leaving the country. It was the culmination of a year-long corruption investigation into the FTSE 100 firm. But yesterday, it was revealed the scandal first erupted after the sex tape was emailed by ‘GSK whistleblower’ to board members, including chief executive Andrew Witty, in March 2013, in what was believed to be a threat or blackmail attempt. The footage showed father-of-two Mr Reilly, who is separated from his wife, having sex with his Chinese girlfriend.

He was given permission to hire investigator Peter Humphrey, 58, to find out who had hidden the camera in his Shanghai flat and who had sent two separate emails making serious fraud allegations. The £20,000 probe, codenamed Project Scorpion, focused on disgruntled former employee Vivien Shi, 49, a prominent businesswoman whose family is part of Shanghai’s communist elite. But a few months after starting to investigate Miss Shi, Mr Humphrey was arrested along with his wife Yu Yingzeng, a US citizen and daughter of one of China’s most eminent atomic weapons scientists. According to the Sunday Times, Mr Humphrey’s arrest and detention in July was at around the same time that China began a police probe into GSK’s alleged bribery.

Mr Reilly, 52, of Sawbridgeworth, Hertfordshire, stepped down from his post as China manager soon after Mr Humphrey’s arrest but remains a GSK employee. He returned to Britain around the same time but voluntarily went back to China within days to assist police with their inquiries. He was charged in May this year and accused by police of presiding over a web of corruption and pressing his sales teams to bribe health officials to meet targets…

hat tip to pharmagossip…  

If found guilty, Mr Reilly, who has a PhD in pharmacology and neurosciences from University College London, could face life in prison. Mr Reilly joined GSK in 1989 and has worked in Singapore, Hong Kong and China. He is separated from Jill, 49, with whom he has two teenage daughters, and has moved out of their £1.2million home. It is understood he met Mrs Reilly at university, where she was studying psychology. Like her husband, she took up a post at GSK, working as a director of capital planning…

In with no echo…, I was hypothesizing that by settling out of civil and criminal suits, the pharmaceutical companies avoid any verdict, and invariably quickly say "we admit to no wrongdoing" implying that they settled for who-knows-what reason [like admitting to the least ignoble of the charges]. In doing that, they dampen the incriminating story which then fades quickly – the anechoic effect [see echo echo echo echo echo echo…]. The most obscene version was GSK settling a $3B suit and signing this agreement – then writing a response in a letter to the Chronicle of Higher Education that denies admission of guilt [see the only enduring contract…]. The way this China-gate story is going, it doesn’t at this point look like that’s going to be an option. This is just plain old crime, and one that has the Chinese up in arms [as it should].

Last month, Britain’s Serious Fraud Office announced it is to investigate the company’s ‘commercial practices’.