SHANGHAI May 15 GlaxoSmithKline Plc
executive Mark Reilly had little inkling he would be charged
with leading a network of corruption in China's pharmaceutical
industry, two sources with ties to the businessman and knowledge
of the investigation said.
The allegations against the Briton, who as GSK's China head
was the firm's legal representative in the country, are the most
serious charges ever laid against a foreign national for
corporate corruption in China, lawyers said.
Police said they had charged Reilly and two Chinese
colleagues with multiple offences on Wednesday, after a 10-month
probe found the firm made billions of yuan from schemes to bribe
doctors and hospitals.
"The fact that Mark's name was on the list of people charged
was definitely a surprise," said a source with direct knowledge
of the investigation. The source declined to be named because of
the sensitivity of the case.
Police findings are usually upheld in Chinese courts,
meaning Reilly and the other executives could face decades in
GSK did not respond to requests for comment on Thursday.
Britain's biggest drugmaker said in a statement on Wednesday
that the allegations were "deeply concerning" and it hoped to
"reach a resolution" that would enable it to continue to operate
in China, a key growth market for Western pharmaceutical giants.
Reilly, a scientist and accountant who has been with GSK for
over two decades, briefly left China after the scandal broke in
July last year. He voluntarily returned to assist authorities
with the probe, with insiders saying the understanding was this
would shield him from charges.
"I've had regular contact with Mark over the past few
months. I would think that this state of affairs is a surprise
to him. I don't think he is prepared, or thought that he could
be culpable," an industry executive in China who has personal
ties to Reilly said.
Attempts to reach Reilly were unsuccessful.
The last major corruption scandal to hit a foreign company
in China involved miner Rio Tinto in 2009,
which resulted in four executives including a Chinese-born
Australian being jailed for between seven and 14 years.
Reilly and two Chinese executives, Zhang Guowei and Zhao
Hongyan, are charged with corporate bribery, bribing
non-government officials and bribing business units.
Officials gave no specific details on the amount of bribes
paid or how much the company had illegally earned, although
previously they accused the firm of funnelling up to 3 billion
yuan ($482 million) to travel agencies to facilitate bribes to
doctors and officials.
According to normal process, Reilly should have been
detained as soon as authorities laid charges against him.
Police could not be reached for comment and the British
consulate declined to comment on Reilly's whereabouts. The
industry executive said he believed the Briton was still in
Reilly had likely been barred from leaving China after his
return to help with the investigation, lawyers said.
The prosecution will now examine the case before passing it
to the courts, which could take as little as a month or much
longer if further investigation is required, lawyers said.
GSK is the most prominent of a number of graft probes that
have been launched against global drug firms since last year,
and authorities are unlikely to risk the investigation being
overturned in the courts.
"For a sensitive and closely followed case like this, the
police and prosecutors will have consulted with each other
already," said Leon Liu, Shanghai-based partner at law firm MWE
Chinese officials visited other international drugmakers
including Novartis AG, AstraZeneca Plc, Sanofi
SA, Eli Lilly & C o and Bayer AG
last year as part of a broad investigation into the sector,
which is rife with bribery between sales staff and doctors.
Legal experts said the GSK case was a wake-up call to
foreign companies that thought their top expatriate executives
were immune from criminal charges as authorities step up a
crackdown on corruption ordered by President Xi Jinping.
"There's a notion that only people of Chinese nationality
are going to go to jail here," said Steven Dickinson,
Qingdao-based partner with law firm Harris Moure.
"People always say they'll never put a Briton or an American
in jail. But they will, and this is just that example."
(Additional reporting by John Ruwitch in SHANGHAI; Editing by