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Wednesday
May142014

Chinese police charge former GSK China chief Mark Reilly

Chinese police Wednesday charged the British former boss of GlaxoSmithKline's China unit and two other company executives with corruption for bribing health officials and doctors.

A Ministry of Public Security official said in Beijing that Mark Reilly (pictured) and two Chinese executives, Zhang Guowei and Zhao Hongyan, offered bribes to hospital personnel and doctors to boost GSK's sales.

All three defendants face up to life in prison.

In July last year, China authorities accused GSK, the UK's biggest pharma, of  paying $482 million in bribes. The Ministry of Public Security said that since 2007 GSK had used 700 travel agencies to deliver the illegal payments.

Police then detained four GSK executives, including Zhang, a GSK human resources director, and Zhao, a legal affairs director.

Reilly had left China when the scandal broke but "voluntarily returned to cooperate with police." Retuers said.

In October, Xinhua reported that Reilly was in China helping with the investigation and hadn't been detained.

Reuters said it wasn't able to contact him Wednesday.

A British consulate spokesperson in Shanghai told Reuters "officials were in regular contact with Reilly and were providing consular assistance."

Xinhua said GSK's China revenue was $1.1 billion in 2012, nearly double from when Reilly took over in 2009.

*     *     *

In April, GSK said it was investigating allegations the company hired government-employed doctors and pharmacists in Iraq as paid sales reps for its products.

The pharma also said it is investigating allegations of bribery in Jordan and Lebanon.

In Poland, GSK is facing a criminal probe for allegedly bribing doctors between 2010 and 2012. Prosecutors said last month they have evidence of illegal payments to 13 health centers.

Thirteen people have been charged by Poland's anti-corruption bureau.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.