GSK executive caught off-guard by China graft charges: sources

Thu May 15, 2014 7:27am EDT
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By Adam Jourdan and Kazunori Takada

SHANGHAI (Reuters) - GlaxoSmithKline Plc (GSK.L: Quote) executive Mark Reilly had little inkling 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.

The allegations against the Briton, who as GSK's China head was the firm's legal representative in the country, are the most serious charges ever laid against a foreign national 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 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," said a source with direct knowledge of the investigation. 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 on Thursday.

Britain's biggest drugmaker said in a statement 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 over 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 this would shield him from charges.   Continued...

A British Airways airplane flies past a signage for pharmaceutical giant GlaxoSmithKline (GSK) in London April 22, 2014. REUTERS/Luke MacGregor