BBC NEWS

China has fined UK pharmaceuticals firm GlaxoSmithKline $490m (297m) after

a court found it guilty of bribery.
The record penalty follows allegations the drug giant paid out bribes to doctors and
hospitals in order to have their products promoted.
The court gave GSK's former head of Chinese operations, Mark Reilly, a suspended threeyear prison sentence and he is set to be deported.
Other GSK executives have also been given suspended jail sentences.
The guilty verdict was delivered after a one-day trial at a court in Changsha, according to
the Xinhua news agency.
Chinese authorities first announced they were investigating GSK in July last year, in what
has become the biggest corruption scandal to hit a foreign firm in years. The company
was accused of having made an estimated $150m in illegal profits
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 in a 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," he said.
"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."
Mick Cooper, analyst at Edison Investment Research in London, said: "GlaxoSmithKline
will hope that this will draw a line under events in China, but it will take time for its
Chinese commercial operations to recover."

Analysis: Carrie Gracie, BBC China editor

This is a humiliating outcome for one of Britain's biggest companies: pleading guilty to
systematic bribery, facing the biggest fine in Chinese history and making an abject
apology to the Chinese government and people.
But after a case lasting more than a year, there was no easy way out for GSK, and at
least now, it can start to rebuild its battered brand in China.

Today GSK said it had learned its lessons, and one of those is clearly that foreign
companies need to keep a close eye on China's fast changing political and regulatory
weather if they are to prosper, or even survive, in this promising but perilous market.
THE GUARDIAN
GlaxoSmithKline has been found guilty of bribery by a Chinese court and has agreed to
pay a fine of 3bn yuan (297m) to the government in Beijing.
At the same time, the former head of its China division, Mark Reilly, and other GSK
executives are facing two- to four-year jail terms, according to the state news agency,
Xinhua. Reilly was accused of running a "massive bribery network".
The bribery case involved allegations that GSK sales executives paid up to 3bn yuan to
doctors to encourage them to use its drugs. Other revelations included news that a sex
tape of Reilly and his girlfriend was emailed to 13 company executives last year,
including the chief executive, Sir Andrew Witty.
The company said the illegal actions of its subsidiary, GSK China Investment Co, were "a
clear breach of GSK's governance and compliance procedures; and are wholly contrary to
the values and standards expected from GSK employees". It has published an apology to
the Chinese government and its people on its website.
According to its latest results, the scandal knocked four percentage points off GSK's sales
growth in emerging markets. The company's staff have also been accused of bribing
doctors in Poland, Iraq, Jordan and Lebanon.
GSK said it had fundamentally changed the incentive programme for its sales force, and
increased the monitoring of invoicing and payments. Sir Andrew 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 been in China for close to a hundred years and we remain fully committed to the
country and its people."
Meanwhile, the Serious Fraud Office is conducting a criminal investigation into the
drugmaker's sales practices around the world, including working with the Chinese
authorities.
The US department of justice is also investigating GSK for possible breaches of the
foreign corrupt practices act.