Sex Video is New Twist in GSK China Bribery Scandal

02.07.2014 -

GlaxoSmithKline (GSK) has confirmed the existence of an intimate video recording of its former China head, Mark Reilly, which the London-based Sunday Times reported kicked off a bribery investigation that has damaged the pharmaceutical giant's business in China.

The newspaper said the recording was shot without Reilly's knowledge or consent at his Shanghai flat and showed the Briton, who is separated from his wife, with his Chinese girlfriend.

It was not clear who shot the video or with what motivation. The video was emailed to top GSK executives in March 2013, Sunday Times said.

In July 2013, Chinese police accused Britain's biggest drugmaker of transferring as much as 3 billion yuan ($482 million) through travel agencies to bribe doctors and officials. Chinese police filed corruption charges against Reilly in May. Barred from leaving China, he could face decades in prison.

China's investigation into GSK and its scrutiny of numerous other foreign and local drugs companies have frightened foreign pharmaceutical executives so much that some fear they could be jailed and have asked their lawyers if they should temporarily leave the country, the news agency Reuters reported.

The drugmaker, which described the bribery allegations as "shameful" when they came to light last year, said it was continuing to cooperate fully with Chinese authorities on the ongoing investigation.

The bribery case has hit GSK's sales in China, as buyers have shied away from doing business with the company and GSK itself has revamped its sales and marketing model.

Bribery allegations involving GSK have come to light since then in other countries and GSK is now investigating claims that bribes were also paid to doctors in Poland, Iraq, Jordan and Lebanon.

In May, Britain's Serious Fraud Office launched a formal criminal investigation into the company.