In A Story of Bribery, Sex Tapes and Political Intrigue, GlaxoSmithKline Rehires Former Exec Linked to China Scandal

In A Story of Bribery, Sex Tapes and Political Intrigue, GlaxoSmithKline Rehires Former Exec Linked to China Scandal
August 3, 2015
By Mark Terry, Breaking News Staff

U.K.-based GlaxoSmithKline announced today that it had re-hired Vivian Shi. Shi was formerly a GSK government affairs executive linked to an internal investigation into alleged bribery accusations at the company’s China unit.

In September 2014, a southern China court fined GSK almost $500 million on charges of bribery. The Changsha Intermediate People’s Court also sentenced Mark Reilly, formerly GSK’s China general manager, and four other company managers, to prison terms that potentially could last up to four years. The sentences were suspended and Reilly was immediately deported.

GSK executives received anonymous emails alleging that people in the company were bribing physicians and Chinese health officials. There has been speculation that Shi was the whistleblower, although she has denied those allegations.

The overall background of the story is even more sensational. Early on, a sex tape of Reilly and his girlfriend was sent to the company. Reilly hired a private investigator to determine who planted the camera in his apartment. The investigator, Peter Humphrey, who is British, and his wife, Yu Yingzeng, who is American, were sentenced to prison in August 2014 for illegally acquiring private records of Chinese citizens and selling the information to GSK and other clients. Reilly confessed to the crimes on Chinese TV, although there were rumors and allegations that both Reilly and Humphrey might have been set up by rogue officers in China’s law enforcement and security programs.

In June 2015, Humphrey was released early from prison for health problems related to cancer. Yu Yingzeng was released shortly afterwards. The two operated ChinaWhys since 2003, a consultancy to investigate fraud and due diligence for international companies.

Humphrey also was hired to investigate the whistleblower allegations related to the bribery charges. Apparently he was unaware that the investigation into the sex tape was related to the bribery investigation and publicly stated that if he’d suspected they were connected, he would not have accepted the sex tape investigation.

Vivian Shi left her Shanghai-based job in 2012, before the scandal erupted. She was cited in several media reports as being connected to the anonymous emails that GSK received about the bribery charges. In some reports she denied the charges.

“We can confirm we have rehired Vivian,” GSK said in a statement. “We are not going to comment further on an individual employee.”

Humphrey also was investigating Shi, apparently on behalf of GSK, to determine if she was sending the emails as part of a smear campaign. At the time, GSK indicated it employed ChinaWhys “to conduct an investigation following a serious breach of privacy and security related to the company’s China general manager. They were not hired to investigate the substance of the allegations of misconduct made by the whistleblower.”

GSK’s internal investigation indicated isolated cases of corruption, but nothing systemic. Shanghai police reached a different conclusion and accused GSK of providing billions of dollars in kickbacks to physicians and health officials to encourage use of the company’s drug. Mark Reilly was one of 46 employees named as suspects.

Despite GSK paying the fines, there are still numerous unanswered questions, including the identity of the whistleblower. There are also many questions about the charges against Humphrey and Yu Yingzeng. ChinaWhys’ investigation was largely inconclusive prior to the two being arrested, which appears to be politically motivated. Humphrey, in a letter from jail, speculated that the investigation may have offended an “influential” person, and Yu sold the U.S. consul that “we got caught up in a war unintentionally.”

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