A Chinese court on Friday fined British drugmaker GlaxoSmithKline 3.0 billion yuan ($490 million) following a nearly year-long bribery probe, the company said. The firm's former head of China operations, Mark Reilly who would be deported, and four other ex-officials were given suspended sentences of between two and four years in prison, the official Xinhua news agency said.
The fine levied by the Changsha Intermediate People's Court after a closed hearing in central Hunan province was the largest ever handed down by a Chinese court, according to Xinhua. It equals the precise amount that China's ministry of public security said last year had been funnelled between GSK and travel agencies since 2007. Police allege that GSK took kickbacks from travel agencies to organise conferences that never took place. The company also "resorted to bribery to boost sales of its medical products and sought benefits in an unfair manner," the court said in a statement, according to Xinhua.
"GSK bribed, in various forms, people working in medical institutions across the country, and the amount of money involved was huge. Five senior executives actively organized, pushed forward and implemented sales with bribery," the court statement added. The firm said in a statement that the court had found it guilty of "bribing non-government personnel".
'Clear breach' of governance - In an apology posted on its website, GSK said that the illegal activities of the firm's China arm "are a clear breach of GSK plc's governance and compliance procedures; and are wholly contrary to the values and standards we expect from our employees". The firm "must work hard to regain the trust of the Chinese people", it added. According to Xinhua, Reilly was given three years in prison but will receive a four-year reprieve and be "expelled" from China. It did not provide further details.
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