Sex video new twist in GSK China bribery scandal

Mon Jun 30, 2014 3:47pm EDT
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By John Ruwitch, Adam Jourdan and Ben Hirschler

SHANGHAI/LONDON (Reuters) - GlaxoSmithKline Plc's (GSK.L: Quote) tangled web of problems in China, including a sex video of its former China chief and anonymous emails alleging corruption, are highlighted in a lengthy draft report prepared for the British drugs firm and seen by Reuters.

The report into the origin of the video and emails was compiled at the request of GSK by ChinaWhys, a Shanghai-based company founded by British investigator Peter Humphrey and his American wife Yu Yingzeng. Presented to GSK on June 6, 2013, it did not reach a conclusion as to who was behind the actions.

On July 10, 2013, authorities detained Humphrey and Yu for illegally buying and selling private information. The couple were subsequently arrested, which typically means the police believe they have enough evidence for the case to be brought to trial.

Five days after their detention, police accused GSK of funneling up to 3 billion yuan ($482 million) through travel agencies to bribe doctors and officials in China.

A GSK spokesman in London confirmed the video existed but did not comment on how it related to the alleged bribery scandal. He also said GSK, Britain's biggest pharmaceutical firm, had hired ChinaWhys to investigate the video.

Reuters was not independently able to verify any link between the video and the bribery case.

The British newspaper the Sunday Times first reported the existence of the video on Sunday.

ChinaWhys was employed in April 2013 to investigate an ex-employee suspected of sending anonymous emails of an intimate video of GSK's then China chief Mark Reilly with his Chinese girlfriend as well as allegations of widespread bribery at the firm.   Continued...

A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai July 12, 2013.  REUTERS/Aly Song