GlaxoSmithKline plc (ADR) (GSK) Faces Fines Worth $489 Million, Former Head to Serve Jail time

GlaxoSmithKline plc (ADR) (GSK)

Nearly after a year and a half, the Chinese authorities have released their verdict for GlaxoSmithKline plc (ADR) (NYSE:GSK), which was accused of bribing doctors to use their medicines. GlaxoSmithKline plc (ADR) (NYSE:GSK) would have to pay fines amounting to £297 million or $489 million to the Chinese government.

The state news agency, Xinhua, further reported that the head of GSK China, Mark Reilly, and other executives are sentenced to jail time for two to four years, although Reilly would be deported to UK instead of facing jail time in China. The fine amount is the biggest against any foreign company in China after Rio Tinto in 2009, which included jail time sentences lying between seven to fourteen years for its executives. The Changsha Intermediate People’s Court in Hunan Province, China issued the sentence.

GlaxoSmithKline plc (ADR) (GSK)

This is not the only corruption case against GlaxoSmithKline plc (ADR) (NYSE:GSK) as the company is facing similar charges in Iraq, Lebanon, Poland, Jordan, and Syria. It is under the scanners of U.S. and British authorities for its corrupt practices overseas.

Sir Andrew Witty, CEO of GlaxoSmithKline plc (ADR) (NYSE:GSK), 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 written an apology note to the Chinese authorities and said to rectify policies at GSKCI. Witty further added,

“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.”

China is one of the largest and fastest growing pharmaceutical markets for GSK and it will keep investing in the economy.

This article has been written by Prakash Pandey.

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