Blackmail, a sex tape and the fatal error that’s left a top Bristish executive facing 20 years inside a hell-hole Chinese jail
AT FIRST sight, it looks like any other casual family portrait: a middle-aged man, with grey hair and a square jaw poses proudly next to his two grown-up daughters. The fetching ‘selfie’ was uploaded to imagesharing website Instagram a fortnight ago by the girl standing at its centre, an 18-year-old student from Hertfordshire called Louise Reilly.
‘A bit late, but happy Father’s Day to my wonderful daddy,’ she wrote in the accompanying blurb. ‘I love and miss you every day.’ Louise took the picture at a cocktail party in December 2012, shortly after winning a place to study geography at Oxford University. Her elder sister, Jessica, who is 21, and studies history at Cambridge University, is standing to her left. yet, as the statement she chose to accompany it hints, an air of sadness now surrounds this seemingly happy photograph.
That’s because the middle-aged father so proudly showing off his high-achieving daughters is one Mark Reilly — a senior executive with British drugs giant GlaxoSmithKline (GSK).
Mr Reilly, 52, was until recently a high-flying business- man with the world at his feet. A glittering 25-year career at GSK had left him dividing time between the Far East — where he ran the £76 billion firm’s Chinese operations — and the exclusive commuter town of Sawbridgeworth in Hertfordshire, where he lived with his wife Jill in a £1.2 million Grade II-listed 17th-century house. His daughters had been educated at Bishop’s Stortford College, a prestigious £25,000-ayear private school, where they excelled at sport, music, and drama, each achieving ten A* grades at GCSE, four A* grades at A-level and sailing into Oxbridge.
Last summer, however, Mr Reilly was cast into the epicentre of a scandal which would quickly and systematically destroy his picture-perfect existence.
It became public on June 27, when police in China organised a high-profile raid on GSK’s offices, amid claims that staff were illegally bribing doctors and healthcare officials to prescribe pharmaceutical products.
A few weeks afterwards, they called Mr Reilly in for questioning. He was promptly banned from leaving the country, and has since spent most of his time in various forms of detention.
Sadly, like anyone facing legal problems in autocratic China, Mr Reilly’s human rights have since been blithely disregarded by the authorities.
For months, he had only limited means to communicate with friends, f a mily, a nd legal representatives, and was unable to see Louise, Jessica or Jill.
Then, i n May, this already perilous situation took a turn for the worse. At a police press conference in Changsha, a 90-minute flight west of Shanghai, Mr Reilly was formally accused of presiding over a ‘massive bribery network’ i n which doctors and health officials were illegally paid £320 million over several years.
In scenes reminiscent of a Soviet-era show trial, detectives aggressively dubbed him a criminal ‘ Godfather’, who they claimed had greased palms with cash and f ree holidays, and arranged for associates to be given sexual favours from prostitutes.
THEY refused to take sceptical questions from assembled reporters, i nstead reading a pre- prepared statement recommending that this supposed ‘criminal’ be prosecuted on multiple counts of bribery and fraud.
The news conference deepened a scandal which had already knocked billions of pounds off shares in GSK, a leading FTSE100 blue-chip firm held by many pension funds, and damaged Anglo - Chinese di pl o matic relations in the process.
In the cold light of day, it also represented a serious affront to justice, compromising a universal principle of fairness: that Mr Reilly should be presumed innocent until proven guilty.
In China an astonishing 98 per cent of court proceedings end in conviction, and this father-of-two now faces the likelihood of a criminal trial.
‘This is a politically charged case, and China’s politicians control the judiciary.
‘So regardless of the facts, Mark Reilly will be found guilty,’ says Professor Willy Lam, a leading expert on China’s justice system. ‘The question of whether he actually committed a crime will not really be considered. The government will also dictate how long the judges will imprison him for.’
The British Consulate in China says it is following Mr Reilly’s case. yet despite this, Professor Lam, a scholar at the Chinese University of Hong Kong, says that he will be effectively tried in secret.
‘There will be no jury. Just a judge and his assistants who decide the verdict.
‘There will be no media allowed i n court, and no scrutiny of evidence. He may be allowed a few relatives and close colleagues present, and perhaps a UK diplomat. That is all.’ As to his eventual fate, Professor Lam adds: ‘Given the amount of money involved, this is a very serious case, and Mr Reilly could easily be sentenced to life. I expect him to get around 20 years.’
In any normal country, that would be bad enough. But this is China, home to one of the world’s most punitive penal systems.
Indeed, the vast Tilanqiao Prison in Shanghai, where Reilly is likely to end up if convicted, is known locally as the ‘city of death’.
Former inmates at the facility have told how guards carry cattle prods and force errant inmates to submerge their heads in buckets full of excrement and urine.
In the notorious ‘ punishment wing’, beatings are rife. Human rights groups have published l engthy critiques of torture methods practised there.
So far, so ugly. But last weekend, this father- of-two’s plight became darker still.
In an extraordinary development, it emerged that China’s police investigation into GSK had been triggered by the circulation of a covertly recorded sex tape, in which Mr Reilly featured.
The video was secretly shot at the British businessman’s Shanghai apartment during 2012 and appeared to show him having extra-marital sex with a young Chinese woman.
It was emailed to a range of senior f i gures at t he drug company last January, as part of what appeared to be a bid to threaten or blackmail them.
In a dramatic twist, I can reveal that the woman it depicted was a secretary who worked at a travel agency accused of helping GSK execute its ‘ bribery’ scheme. Even without that tricky fact, the addition of a sex tape to an already snowballing corporate scandal was hugely embarrassing for GSK (which says it is ‘cooperating fully’ with the Chinese investigation), and deeply upsetting for Mr Reilly and his family.
yet its existence also, surely, suggests that someone, somewhere, is going to very great — not to mention underhand — lengths to bring him and the company down.
Mr Reilly’s nearest and dearest certainly suspect so. Louise and Jessica are (on the advice of the Foreign Office) maintaining a dignified silence, f or f ear of further provoking the Chinese authorities.
SO TOO are Mark’s mother, brother and sister. However, close friends tell me they are increasingly convinced that Mr Reilly is the hapless victim of an organised sting. ‘ Mark has certainly made mistakes,’ says a source with intimate knowledge of the case.
‘He has made bad decisions in his personal life, particularly this sexual indiscretion, and done the odd thing he regrets in business.
‘But is he some sort of master criminal? Of course he isn’t. Does he deserve to spend 20 years in jail? Absolutely not. It’s a terrible stitch-up.’
The source said Reilly has been ‘in and out of detention’ for the past year, sometimes in formal custody, more often in hotels with police officers stationed outside his room.
He remains an employee of GSK, but is able to have only ‘very limited conversations’ with either the firm, his lawyers, or even his daughters, who in an effort to lighten their mood have taken to calling themselves ‘Team Reilly’.
‘ The family’s first and only priority is to secure Mark’s safe return,’ the source said.
‘But this is China we are dealing with, so things don’t look good. For a man who had so much, it’s very, very sad.’
Mr Reilly’s ill- fated Chinese
adventure began in 2009, when he was offered a promotion to become general manager of GSK’s pharmaceuticals division there.
A company ‘lifer’ who joined the firm in 1989, shortly after leaving university, he and Jill (who also has a high-powered executive job at GSK) had previously worked in the U.S, where Louise was born, and Singapore.
With their then-teenage girls in secondary school, Reilly was reluctant once more to uproot his family, however. So he decided to move alone to Shanghai, where Jill and the children would join him in school holidays. On paper, the move represented a fantastic career opportunity.
Though GSK is one of the world’s largest drug companies, its footprint in China is relatively tiny. Indeed, although the country boasts more than 1.3 billion citizens, and is growing dramatically wealthier, it still represents just 3.5 per cent of the firm’s global sales.
Reilly duly set about dramatically increasing the firm’s revenues, setting ambitious sales targets for his mostly Chinese staff. But his eagerness to pursue those goals sparked friction with local authorities.
‘Like most companies in its field, Glaxo has a highly aggressive sales culture,’ says a Shanghai-based source with knowledge of the company’s operations.
‘Sometimes, that has got it in trouble with regulators.’
A few years ago, for example, the firm was ordered to pay a record $3 billion (£1.7 billion) fine in the U.S. after being caught illegally paying doctors to prescribe dangerous drugs. ‘ Mark was steeped in this culture, where you push the rules to the limit in order to succeed.
‘Sometimes, you overstep the mark, and the company has to row back, apologise, or even pay a fine,’ adds the source.
‘In China, it doesn’t work like that. Get caught, and you’ll go to prison.’
Trouble began in 2012, when an anonymous whistleblower, thought to be a disgruntled GSK employee, began sending emails to China’s healthcare regulator, making wild allegations about sales practices.
A total of 23 messages were sent, alleging that GSK staff were routinely bribing doctors and healthcare professionals with the authorisation of senior managers. However they were short on details.
In January last year, the stakes were raised, significantly.
An 11-page email was dispatched f rom the address ‘gskwhistleblower@gmail.com’. In its subject line it claimed to contain a ‘notification of bribery by GSK in China’.
The email — a copy of which has been passed to the Daily Mail — alleged that the firm ‘has engaged in illegal marketing and largescale bribery to sell its products to Chinese hospitals and doctors’. It claimed, among other things, that sales staff were wired £1,000 each month from a Citibank account to wine, dine, buy prostitutes for, and pay cash bribes to ‘key decision-makers’ in the purchasing departments of hospitals. The email named names and gave dates. It told how attempts were made to conceal payments, and accused the firm of doing l i ttle to prevent endemic bribery.
It would later end up in the hands of the police, who appeared to quote it (at times verbatim) in May this year, while outlining potential charges against not just Mr Reilly, but 45 of his Chinese colleagues.
‘Is what the email alleges true? I have no idea,’ says the Shanghai source. ‘Even if it is, Mark didn’t know every detail of what went on. He hardly spoke Chinese, for starters. How could he have known? Shanghai is a very fast city. It’s easy to get caught up in the idea that everyone’s a bit dodgy and you have to do dodgy things to get along. If the allegations are true, I could see how it could have happened. But he’s no crook.’ Unfortunately, f or Reilly, his case nonetheless struck a potent political chord. The Beijing government is attempting to crack down on a ‘backhander culture’ traditional in Chinese business circles, and GSK, as a wealthy multinational, makes an ideal target. ‘By coming down hard on someone like Reilly,’ says Prof Lam, ‘the authorities can show people that bribery is something they are taking seriously.’
If that was indeed their aim, they were handed a further gift in March last year, when a second email was sent, from the same address, to a separate group of senior staff. This added details to corruption claims, claiming that doctors and their families were given free holidays in India, Brazil and Japan by GSK, under the guise of attending conference. Agencies were hired to organise luxury travel, and hand them thousands of dollars in cash as ‘speaking fees’, it said.
Attached to the email was large computer file. It contained the tape of Reilly and his mistress. The video was shown to Reilly soon afterwards, during a visit to GSK’s headquarters in London.
He promptly returned to Shanghai and hired a fellow British national, private investigator Peter Humphrey, to establish who had leaked it. That investigation was still ongoing in late June last year when police carried out their highprofile raid on GSK’s offices. Mr Reilly promptly flew to the UK, on a scheduled holiday.
HOWEVER several weeks l ater, he bizarrely decided to return to China to (as GSK put it) ‘ help police with their inquiries’. That move, which of course led to his detention, has until now been shrouded in mystery, since it seems i nconceivable a right- thinking British citizen facing any prospect of prosecution in a country such as China should freely travel there.
However, I understand that Reilly was at least partly motivated to return in an ill- fated effort to suppress the sex tape. ‘At the time, you have to remember that Mark was a married man,’ says a close friend. ‘His wife did not know that he had committed any indiscretion.
‘My instinct is that he thought he was clever enough to get out there, sort the regulatory problems out and tie up loose ends in a way that would prevent her ever finding out about the tape.’
A second source adds: ‘ Don’t forget he’s someone who cares a lot about his work, believes in his innocence, and wanted to clear his and his company’s name.
‘If he’d had any inkling at all that he’d face a prison spell, he’d never have set foot there again.’
Sadly, this misjudgment would cost him both his liberty and his marriage: for reports this week claimed he and Jill had separated.
This week, a GSK spokesman said: ‘This is a very difficult and complex situation, and we are doing all we can to support Mark and his family through this distressing time.
‘Mark is a senior and long-standing GSK employee who has given valuable service to the company in a number of leadership roles.
‘After discussions with t he company, Mark returned voluntarily to China last year to help the authorities with their investigation. GSK is co-operating fully with the i nvestigation by the Chinese authorities.’
Meanwhile, Mr Humphrey was also arrested after allegedly breaking Chinese data protection rules while investigating a Chinese woman — who is a politically connected former GSK employee — suspected of being the whistleblower.
His case will be heard, again in secret, later this month.
One of the few rays of sunshine, as Mark Reilly contemplates this dark future, is the continuing loyalty of his daughters. A few days ago, Louise posted a black and white photograph on the internet showing her hugging him at home in happier days.
‘No matter what,’ she wrote, ‘I will always be a daddy’s girl.’