GlaxoSmithKline Plc was imposed a fine of £297 million ($489 million) and a top executive received a suspended sentence, for bribing doctors in China, ending a 15-month investigation.
“Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK,” Chief Executive Officer Andrew Witty said in the 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.”
According to the official statement of GlaxoSmithKline, the fine will be paid by the company with existing cash resources. The former top executive of the company in the country – Mr. Mark Reilly – was sentenced to three years in jail, though the verdict was suspended for four years. He will not go to prison, if he doesnt break the law, and will be deported to the UK.
“The illegal activities of GSKCI are a clear breach of GSKs governance and compliance procedures; and are wholly contrary to the values and standards expected from GSK employees,” the company said in its statement.
According to the official Chinese news agency Xinhua, this penalty reflects the biggest corporate fine ever imposed in China. The investigations against the British companys sales practices were started by the Chinese authorities last June. The case was handed to prosecutors in May 2014.
GlaxoSmithKline shared that Chinese authorities were provided with the companys full cooperation and assistance, and GSK has also taken measures to resolve the issues identified at the operations of its unit.
A separate apology to the citizens of China was released on the UK companys Chinese website, saying: “GSK PLC sincerely apologizes to the Chinese patients, doctors and hospitals and to the Chinese Government and the Chinese people.”
GlaxoSmithKline Plc rose by 0.95% to trade at GBX1 450.1 per share at 12:24 GMT, marking a one year change of -7.99%. The company is valued at £69.67. According to the Financial Times, the 24 analysts offering 12-month price targets for GlaxoSmithKline Plc have a median target of £15.86, with a high estimate of £19.20 and a low estimate of £13.50. The median estimate represents a 10.37% increase from the previous close of £14.37.
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