Telegraph: GlaxoSmithKline's ex-China chief barred from leaving country

GlaxoSmithKline's former China chief, absent from the country when bribery allegations surfaced this summer, returned in late July to cooperate with investigators. Now, The Telegraph reports that Mark Reilly is no longer on the scene voluntarily. Chinese authorities have barred him from leaving the country, the U.K. newspaper reports.

Glaxo ($GSK) confirms that Reilly met with authorities in Changsha recently "to provide them with information and assistance." But he hasn't been confined to the country, much less held in a hotel room as the Telegraph's sources suggest. "At no point was he detained," a spokesman told the newspaper. "Mark remains in China to help further with the investigation should it be required."

The story the Telegraph's sources tell is more dramatic: Reilly was initially barred from international travel before he flew home to London in July. "The police were really angry that Reilly left in the first place," one of the sources said. "They had put a travel ban on him."

GSK maintains that Reilly is not and was not subject to an official travel ban. If he had been--or is--he would have had company; Glaxo's local finance chief, Steve Nechelput, was barred from leaving in July. And with dozens of GSK employees detained--and still in custody months later--confinement to China's borders seems mild by comparison. GSK has acknowledged that some employees may have breached Chinese law, offering apologies and price cuts in recompense.

As the investigation wears on, The Telegraph notes, families of detained GSK workers have banded together to argue for leniency. Meanwhile, top officials of both countries are on the case: U.K. Chancellor George Osborne is in China now on a mission to improve economic relations, and took the chance to discuss the GSK case with his Chinese counterparts, while Chinese Prime Minister Li Keqiang is personally overseeing the case, the Telegraph says.

A cadre of Chinese higher-ups has been spearheading the investigation, which is just part of a government crackdown on alleged corruption and monopolistic pricing. Multinational drugmakers have borne the brunt of it, with whistleblowers fingering a Big Pharma who's who, including Eli Lilly ($LLY), Novartis ($NVS), Bayer and Sanofi ($SNY). The probes have spooked doctors and sales reps alike, so the industry's promotional activities have all but ground to a halt, and companies expect a hit to China sales. We'll find out just how much as drugmakers unveil their third-quarter results.

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