GlaxoSmithKline fined $480 million over China bribery issues

UK pharma giant GlaxoSmithKline (LSE: GSK) today announced that the Changsha Intermediate People’s Court in Hunan Province, China, ruled that GSK China Investment Co Ltd (GSKCI) has, 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 verdict follows investigations initiated by China’s Ministry of Public Security in June 2013. As a result of the Court’s verdict, GSKCI will pay a fine of £297 million ($480 million, 3 billion renminbi at a currency exchange rate of 10.0980) to the Chinese government. This will be funded through existing cash resources. Associated costs and charges related to restructuring will be included in GSK’s third quarter update.

GSK's former China head Mark Reilly will be among those jailed, according to China's Xinhua news agency. In fact, Mr Reilly was given a suspended prison sentence and will be reported, the UK public broadcaster the BBC reported.