GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK)’s worries seem to be mounting as the company confirmed Sunday the existence of an intimate video recording of its former China head, Mark Reilly.
Details on Reilly sex tape
According to a Sunday Times report, the secretly filmed Reilly sex tape was emailed to top GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) executives in March 2013. The report said the recording was shot without Reilly’s knowledge or consent at his Shanghai flat and showed Reilly, who is separated from his wife, with his Chinese girlfriend.
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GSK’s China bribery scandal
Last year, Chinese state media accused British pharmaceutical giant GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) over a bribery investigation, accusing the firm of being responsible rather than just individual employees. Police have accused GSK staff of offering doctors bribes to prescribe its products and detained four executives.
The Chinese Ministry of Public Security claimed that GSK paid three billion Chinese yuan ($470 million) to Chinese nationals as bribes using travel agencies for several years beginning in 2007.
The inquiry into the British pharmaceutical giant comes as authorities target foreign firms in fields ranging from medicines to food, sometimes for what analysts say is standard practice engaged in on a larger scale by domestic companies.
After a 10-month investigation, Mr. Reilly was among 46 GSK employees identified by Chinese police in May as suspects when they handed evidence of ‘massive and systemic bribery’ to prosecutors. The former China head Mark Reilly remains in China, although he is not in custody. The Briton has been barred from leaving China and he is still a GlaxoSmithKline employee, but has been replaced as China head.
Problems galore for GSK
In April, GlaxoSmithKline announced it was under investigation for bribery in Poland. The charge relates to efforts to promote GSK’s asthma drug Seretide. Eleven doctors and a GSK regional manager have been charged over alleged corruption between 2010 and 2012. In 2012, the company paid a $3 billion penalty after pleading guilty to promoting two drugs for off-label uses as well as withholding safety data from a clinical trial of a diabetes drug from the FDA.
In a statement issued Sunday, GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) said: “The issues relating to our China business are very difficult and complicated”. 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.