GSK China sex tape ‘sent to Witty’
GlaxoSmithKline was scrambling to defend itself over the weekend as new details emerged concerning the extent of its suspected corruption in China.
The firm is currently fighting allegations that it spent £320 million fund to offer cash, prostitutes and gifts to doctors in the country.
These allegations were made public by Chinese authorities in June last year, with GSK saying it knew nothing about them.
But according to a report in The Sunday Times, GSK was sent details of the allegations in January 2013 by an anonymous informant known only as ‘gskwhistleblower’ – which state that the company used travel budgets to pay doctors up to £1,000 a month to encourage them to prescribe its drugs.
These emails were seen by 13 GSK executives, its auditing firm PwC and the company’s chief executive Sir Andrew Witty, the newspaper says.
A second set of emails reiterating these allegations were sent again in May last year, but this time along with a secretly recorded ‘sex tape’ of GSK’s former China boss Mark Reilly, who has since been arrested and charged with bribery allegations. He still works for GSK.
The video shows Reilly with his Chinese girlfriend in his Shanghai flat; he is currently separated from his wife. GSK has now admitted to the recording’s existence.
Twists and turns
At the time when these emails were sent Reilly hired corporate investigator Peter Humphrey — at a rate of £20,000 — to look into the security breach.
Humphrey’s report, code-named ‘Project Scorpion’, failed to establish who planted a camera in Reilly’s bedroom.
GSK had told Humphrey that he was simply looking at a ‘smear campaign’ into the firm, and neglected to tell him about the allegations by gskwhistleblower. It waited two months to tell him about the emails The Sunday Times reports.
When he did finally see the emails from the whistle-blower, he said they were ‘totally credible’ and warned they would lead to an external investigation – a prediction that turned out to be true.
But in a further twist, Humphrey has since been arrested in Shanghai after he began to investigate GSK’s former government affairs lead Vivian Shi — who was suspected of being ‘gskwhistleblower’ — in relation to the email containing the video.
Details of the tape and chronology of events will heap further pressure on GSK, that has repeatedly downplayed any notion of widespread wrongdoing in China.
A handful of employees were sacked for fiddling expenses, considered to be ‘low-level issues’, and the firm has been adamant that it has investigated and found no evidence to support the allegations of far-reaching corruption.
Since June last year, Chinese authorities have levelled similar accusations as the whistle-blower and say that GSK generated billions of yuan of revenue illegally.
A spokesman for the London-based company says: “The issues relating to our China business are very difficult and complicated. The investigation by the Chinese authorities remains ongoing and we are co-operating fully with this investigation. Out of respect for the process we cannot comment on it at this time.
“As we have said previously, the allegations that have been raised are deeply concerning to us.
“We have committed significant resources to find out what happened in China, including an independent legal review. We also continue to make fundamental changes to our business in China,” he says.
And the problems haven’t ended there, as in May the Serious Fraud Office in the UK opened a criminal investigation into the Chinese scandal.
It is the latest in a series of setbacks for the business which has also been accused of bribery in Iraq, Lebanon, Jordan and Poland over the past six months.
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