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GSK replaces China chief amid corruption scandal

A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in S
A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in S

By Ben Hirschler

LONDON (Reuters) - GlaxoSmithKline has appointed one of its top European executives as the new head of operations in China, amid a corruption scandal there that has rocked Britain's biggest drug maker.

Herve Gisserot, senior vice president for Europe, will take over as general manager from Mark Reilly, who will remain with the company as a senior member of the management team, a spokesman said on Thursday.

Reilly, currently in Britain, will continue to help lead GSK's response to the Chinese government's bribery investigation - but the spokesman declined to say whether he would travel back to China.

Reilly has been working at GSK's headquarters on the outskirts of London since arriving from China in early July for what people familiar with the situation said at the time were routine meetings.

"From what we understand and have been told by the authorities there are no allegations of wrongdoing against Mark (Reilly)," the spokesman said.

Gisserot will transition over the coming weeks into his new role, where his prime focus will be to ensure that GSK's China business continues to operate as smoothly as possible.

FINANCE HEAD FREE TO TRAVEL

At the same time, travel restrictions on GSK's finance head for China, Steve Nechelput, which had prevented him from leaving the country, are believed to have been lifted, the spokesman added.

Nechelput will continue in his role as finance director for GSK China and will remain based there. News last week that Nechelput had been stopped from leaving China sparked concern about the scale of the probe facing GSK, although GSK said he had not been questioned or detained by authorities.

Chinese police have detained four Chinese GSK executives in connection with allegations that the drug maker funneled up to 3 billion yuan ($489 million) to travel agencies to facilitate bribes to doctors and officials.

GSK has admitted that some Chinese executives appeared to have broken the law but Chief Executive Andrew Witty said on Wednesday that head office had had no knowledge of the alleged wrongdoing.

Witty said the "deeply disappointing" episode appeared to involve certain senior local staff working outside GSK systems. He has commissioned law firm Ropes & Gray to carry out an independent review into what happened.

In addition to running much of Europe for GSK, new China head Gisserot has also acted as president of the French pharmaceutical industry trade body LEEM, a position the group said he would give up at the end of August.

(Editing by Kate Holton and Patrick Graham)

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