Chinese police charge former GSK China head with bribery

GSK is Britain’s biggest drugmaker.

By: Reuters | Beijing | Published: May 15, 2014 1:37 am

Chinese police on Wednesday said they had charged the former British boss of drugmaker GlaxoSmithKline PLC’s China business and other colleagues with corruption, after a probe found the firm made billions of yuan from elaborate schemes to bribe doctors and hospitals.

Mark Reilly and two Chinese executives, Zhang Guowei and Zhao Hongyan, were also suspected of bribing officials in the industry and commerce departments of Beijing and Shanghai, the official Xinhua news agency reported, quoting police in Hunan province.

The case is the biggest corruption scandal to hit a foreign company in China since the Rio Tinto affair in 2009, which resulted in four executives, including an Australian, being jailed for between seven and 14 years.

GSK is Britain’s biggest drugmaker.

“(GSK) departments offered bribes to hospitals and doctors as well as personnel to boost their sales. The money involved was in billions of yuan,” a Ministry of Public Security official told a press conference in Beijing.

The charges — which carry a maximum sentence of life in prison in the case of bribery — were seen as harsher than many industry insiders and China-based foreign executives had expected.

Officials gave no specific details on the amount of bribes paid or exactly how much the company had illegally earned, although they had previously accused the firm of funneling up to 3 billion yuan ($482 million) to travel agencies to facilitate bribes to doctors and officials. GSK said it was cooperating with the authorities.

“We take the allegations that have been raised very seriously. They are deeply concerning to us and contrary to the values of GSK,” the drugmaker said in a brief statement issued in London, its headquarters.

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