GlaxoSmithKline fined £298 million for paying bribes to boost sales in China

Will Green is news editor of Supply Management
19 September 2014

GlaxoSmithKline (GSK) has been fined a record three billion yuan (£298 million) by a court in China for bribery.

According to state news agency Xinhua, the Changsha Intermediate People’s Court “ruled the firm was guilty” of bribing non-government personnel to “boost sales of its medical products” following a closed-door trial. The fine is the biggest ever imposed by a Chinese court.

Five individuals within the firm were given suspended sentences of between two to four years in prison. British national Mark Reilly, former manager of GSK China, was given three years, suspended for four years, and he will be expelled from the country.

The court said the sentences were reduced “since they confessed the facts truthfully and were considered to have given themselves up”, according to Xinhua.

The allegations first came to light in July 2013 when a number of arrests were made and GSK announced a review.

GSK said it had taken action to address the issues including “decoupling sales targets from compensation” and “significantly reducing and changing engagement activities with healthcare professionals”. The firm has also published a statement of apology to the Chinese government and its people.

Sir Andrew Witty, GSK chief executive officer, said: “Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK. 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.”

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