China hands British drugs firm GSK record $489m fine for paying bribes

China fined GlaxoSmithKline Plc (GSK) a record $489 million on Friday for paying bribes to doctors to use its drugs, ending a damaging chapter for the British drugs manufacturer. A court in the southern city of Changsha handed suspended jail sentences to Mark Reilly, the former head of GSK in China, and four other GSK executives of between two and four years, according to state news agency Xinhua. Briton Reilly, shown on state television wearing a suit and looking tired during the trial, will be deported, a source with knowledge of the case said.

If GSK China can learn a profound lesson and carry out its business according to the rule of law, then it can once again win the trust of China’s government and people

Statement from state news agency Xinhua

The fine, equivalent to around 4 percent of GSK’s 2013 operating profits, was less than some investors had feared. GSK said it had “published a statement of apology to the Chinese government and its people. Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK,” said chief executive Sir Andrew Witty in a statement.

We have and will continue to learn from this. GSK has been in China for close to a hundred years and we remain fully committed to the country and its people

GSK Chief Executive Sir Andrew Witty