Years removed from a bruising bribery scandal in China, GlaxoSmithKline has been winning awards for its corporate behavior. But a new lawsuit filed in a U.S. federal court may bring the scandal back to the fore.
Private investigator couple Peter Humphrey and Yu Yingzeng have filed a suit alleging that GlaxoSmithKline hired them to investigate a whistleblower and misled them about the case, ultimately leading to their imprisonment, according to a Tuesday filing.
For its part, GSK said it does “not believe this case has any merit and will vigorously defend against the allegations."
Humphrey and Yu say that GSK hired them to look into Vivian Shi, then the company’s government relations head in China; GSK believed she was the source of the bribery allegations. But the investigators say they were hired with the understanding that the bribery allegations were false.
Instead, they were tasked with tracking the source of a clandestine sex tape involving GSK’s former China head, Mark Reilly, that was sent to executives along with the corruption allegations. The suit says GSK hired the couple to create a "dossier" on Shi to "frame her as a vindictive former employee."
The pair were arrested in 2013 for illegally obtaining and selling personal information about Chinese citizens. After a not-fully-public legal process, Humphrey received a 2.5-year prison sentence and Yu was sentenced to 2 years.
In the Chinese prison, the plaintiffs were "denied fresh air and proper medical treatment," according to the suit. The situation also destroyed their "profitable China due diligence business."
The private eyes say Shi had strong ties with the Communist Party and their investigation into her actions triggered their troubles, according to the filing. Now, they’re seeking damages for lost business and for the physical and emotional stress they suffered while in prison.
In the wake of the scandal, GlaxoSmithKline paid a $489 million fine and rolled out marketing reforms worldwide. As part of that reform—and to prevent future trouble—the company abolished individual sales quotas.