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British GM ordered GSK China employees to bribe: police

world Updated: May 14, 2014 20:15 IST
Sutirtho Patranobis
Glaxo smith kline

Mark Reilly, the British GM of pharmaceutical giant GSK’s China operations had ordered his employees in Beijing to offer bribes to doctors, hospitals and medical institutions to boost sales, the Chinese police alleged Wednesday.

Announcing the findings of a high-profile investigations into the operations of GSK, the police of Changsha city was quoted by the state media as saying: “Reilly allegedly pressed his sales teams to bribe hospitals, doctors, other medical institutions and organisations through various means and gained illegal revenue worth billions.”

Reilly became head of prescription drugs at GSK China in Jan. 2009 and was promoted to general manager of GSK China in Nov. 2012.

Last year, the Chinese police had announced the detention of four Chinese GSK executives in connection with allegations that the drug-maker funnelled up to 3bn Yuan to travel agencies to facilitate bribes to doctors and officials.

In all 46 suspects were investigated about their alleged involvement in corruption and increasing revenue through paying bribes, the police said.

According to the official news agency, Xinhua, Reilly and his colleagues disguised illegal revenue generated in the Chinese market by forging transactions between GSK China and several foreign arms of GSK, making the revenue look like funds used to purchase raw materials in China.

“They made every effort to cover up the illegal practice during regular checks by regulatory authorities. In terms of sales of prescription drugs and vaccines, police found that all pharmaceutical factories and departments of GSK China nationwide had been involved in commercial bribery,” the Xinhua report said.

Zhang Guowei, a key suspect who was vice president and human resources director of GSK China, told Xinhua that the focus on sales growth led to the bribery.

“The global headquarters imposed high sales growth targets. When Reilly took over the post, the company's strategy shifted from profit-oriented to sales-oriented. The sales target in China was raised every year to compensate the reduction in U.S. and European markets,” Zhang said.