GSK fined nearly £300m by Chinese court for bribing officials
Following an investigation begun in June 2013
GSK says its China Investment (GSKCI) unit has been fined £297m by the Changsha Intermediate People's Court in Hunan Province after being found guilty of bribing non-government personnel.
The verdict follows investigations initiated by China's Ministry of Public Security in June 2013.
GSK's former China head, Mark Reilly, will be jailed with other executives according to China's Xinhua news agency.
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.
'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,' he said.
'We will continue to expand access to innovative medicines and vaccines to improve their health and well-being. We will also continue to invest directly in the country to support the government's health care reform agenda and long-term plans for economic growth.'
GSK said the fine would be funded through existing cash resources. Associated costs and charges related to restructuring will be included in the company's third quarter update.
The company said the illegal activities of GSKCI 'are a clear breach of GSK's governance and compliance procedures; and are wholly contrary to the values and standards expected from GSK employees'.
It added that it has taken steps to rectify the issues identified at GSKCI, including changing its incentive programme for its salesforces; significantly reducing and changing engagement activities with healthcare professionals; and expanding processes for review and monitoring of invoicing and payments.
