GSK China hit with record fine, says sorry

CHANGSHA - The China branch of British drug maker GlaxoSmithKline (GSK) has been fined 3 billion yuan (489 million US dollars) for paying bribes, a verdict the firm "fully accepts" in an contrite statement.

In Friday's closed-door trial, Changsha Intermediate People's Court in central China's Hunan Province ruled the firm guilty of "bribing non-government personnel" and imposed the fine, the biggest ever by a Chinese court. Five individuals with the firm were sentenced to between two and four years in prison with reprieves.

GSK China, known in the court statement as GSKCI, "resorted to bribery to boost sales of its medical products and sought benefits in an unfair manner," the court statement read.

"[The firm] 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," it said.

Among the five, Mark Reilly, a British national and former manager of GSK China, has been given three years with a four-year reprieve and will be expelled from China.

Another three, namely former human resources director Zhang Guowei, former vice president and operations manager Liang Hong and former legal affairs director Zhao Hongyan, were given two to three years with reprieves ranging from two to three years. Former business development manager Huang Hong received three years in prison with a four-year reprieve for both giving and receiving bribes.

According to the court, sentences of the five were reduced since they confessed the facts fully and were considered to have given themselves up.

The verdicts were read in the presence of relatives of the defendants, people from various walks of life and some reporters. The defendants have chosen not to appeal.

COMPANY APOLOGY

Following the verdict, the company posted an apology on its Chinese website, saying that it "fully accepts the facts and evidence of the investigation, and the verdict of the Chinese judicial authorities."

GSK "sincerely apologizes to Chinese patients, doctors and hospitals, and to the Chinese Government and the Chinese people" and "deeply regrets the damage caused."

It also apologized for harm caused by its illegal private investigation.

The apology described the events as a clear breach of GSK's governance and "wholly contrary to the values and standards we expect from our employees."

The company will continue to invest in China and support research. It will continue to develop new medicines in China and increase access to its products in rural areas "through greater expansion of production and through price flexibility."