British drugmaker GlaxoSmithKline fined record $620 million in China graft probe

A flag (left) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in Shanghai in this July 12, 2013, file photo. A Chinese court on Friday fined British drugmaker GlaxoSmit
A flag (left) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in Shanghai in this July 12, 2013, file photo. A Chinese court on Friday fined British drugmaker GlaxoSmithKline (GSK) 3 billion yuan (S$620 million) following a nearly year-long bribery probe, in what is a record penalty for China, state news agency Xinhua said. -- PHOTO: REUTERS

BEIJING (AFP, REUTERS) - A Chinese court on Friday fined British drugmaker GlaxoSmithKline (GSK) 3 billion yuan (S$620 million) following a nearly year-long bribery probe, in what is a record penalty for China, state news agency Xinhua said.

Mark Reilly, the British former head of GSK in China, and an unstated number of GSK executives will also be jailed for two to four years, Xinhua said following the verdict by the Changsha Intermediate People's Court in central China's Hunan province. However, a source with direct knowledge of the matter said Reilly will be deported from China and will not face jail time in the country.

Chinese authorities had accused GSK employees of bribing hospitals, doctors and health institutions to gain billions of dollars in illegal revenue.

The Changsha court ruled that GSKCI had, “according to Chinese law, offered money or property to non-government personnel in order to obtain improper commercial gains, and been found guilty of bribing non-government personnel,” the drugmaker said in a statement, referring to GSK China Investment Co. Ltd.

“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 said.

The drugmaker also posted a statement of apology to the Chinese government on its website.

GSK made no mention of the prison sentences in its statement.