GlaxoSmithKline has confirmed the existence of a sex tape featuring Mark Reilly, the former manager at the centre of the company’s corruption investigation.
The Chinese corruption scandal at GlaxoSmithKline was sparked by a sex tape involving Mark Reilly, the former manager at the centre of the company’s ongoing bribery investigation, it has emerged.
In an extraordinary twist on the scandal that has engulfed the pharmaceutical giant since early last year, GSK has confirmed the existence of footage showing Mr Reilly, who is separated from his wife, having sex with his Chinese girlfriend in his Shanghai flat.
The covert video of Mr Reilly, who stepped down as head of GSK’s China business last July, was sent by email to senior GSK executives on March 16 last year, in an apparent bribery attempt.
Sir Andrew Witty, the chief executive of GSK, and, until recently, the lead non-executive board member for the Department for Business, was among the top managers who received the footage from unidentified sources.
GSK authorised Mr Reilly to spend an initial £20,000 of the company’s money on hiring a private investigator, Peter Humphrey, to discover the perpetrators of the sting, believed to be part of wider attempts to expose the drugs giant to punitive action by Chinese authorities.
Mr Humphrey’s report, code-named “Project Scorpion”, failed to establish who planted a camera in Mr Reilly’s bedroom.
But his activities led to Chinese authorities launching a major probe into corruption at GSK just two months later.
Mr Humphrey also studied the emails sent by a whistleblower last January to 13 senior executives at GSK and two employees at its independent auditor, PwC.
He believed the emails, sent by a source called “gskwhistleblower”, were “totally credible”. In May this year, the Serious Fraud Office announced a formal criminal investigation into GSK’s commercial practices, as Mr Humphrey predicted.
The same month, Mr Reilly was arrested on charges of ordering his subordinates to form a massive bribery network that resulted in higher drug prices and illegal revenue of more than $150m (£88m).
GSK told the Daily Telegraph that it has “committed significant resources to find out what happened in China”, including an independent legal review. The company is also co-operating fully with the ongoing bribery investigation by Chinese authorities.
A spokesman said: “We have zero tolerance for any kind of corruption in our business and … we take action against any breaches.”