Yahoo – AFP,
Felicia Sonmez, 19 Sep 2014
Beijing (AFP) - A Chinese court on Friday fined British drugmaker GlaxoSmithKline 3.0 billion yuan ($490 million) following a nearly year-long bribery probe, the company said.
A GlaxoSmithKline (GSK) employee enters their office headquarters in Shanghai on July 1, 2013 |
Beijing (AFP) - A Chinese court on Friday fined British drugmaker GlaxoSmithKline 3.0 billion yuan ($490 million) following a nearly year-long bribery probe, the company said.
The firm's
former head of China operations, Mark Reilly who would be deported, and four
other ex-officials were given suspended sentences of between two and four years
in prison, the official Xinhua news agency said.
The fine
levied by the Changsha Intermediate People's Court after a closed hearing in
central Hunan province was the largest ever handed down by a Chinese court,
according to Xinhua.
GlaxoSmithKline
global headquarters in
west London on July 29, 2013 (AFP Photo/
Ben Stansall)
|
Police
allege that GSK took kickbacks from travel agencies to organise conferences
that never took place.
The company
also "resorted to bribery to boost sales of its medical products and
sought benefits in an unfair manner," the court said in a statement,
according to Xinhua.
"GSK
bribed, in various forms, people working in medical institutions across the country,
and the amount of money involved was huge. Five senior executives actively
organized, pushed forward and implemented sales with bribery," the court
statement added.
The firm
said in a statement that the court had found it guilty of "bribing
non-government personnel".
'Clear
breach' of governance
In an
apology posted on its website, GSK said that the illegal activities of the
firm's China arm "are a clear breach of GSK plc's governance and
compliance procedures; and are wholly contrary to the values and standards we
expect from our employees".
The firm
"must work hard to regain the trust of the Chinese people", it added.
According
to Xinhua, Reilly was given three years in prison but will receive a four-year
reprieve and be "expelled" from China. It did not provide further
details.
Three other
GSK officials -- former human resources director Zhang Guowei, former vice
president Liang Hong and former legal affairs director Zhao Hongyan -- received
sentences and reprieves of two to three years, Xinhua said.
The firm's
former general manager for business development, Huang Hong, was found guilty
of "bribing and receiving bribes" and received a sentence of three
years, which will be suspended for four years, according to Xinhua.
The court
decided to reduce the jail sentences for the five "since they confessed
the facts truthfully and were considered to have given themselves up,"
Xinhua reported.
After being
detained by Chinese authorities last year, Huang was quoted in state media as
saying that GSK had set up a special team to handle important clients which had
an annual "relations" budget of nearly 10 million yuan ($1.6
million).
Sales
growth targets set by the firm as high as 25 percent put pressure on employees,
Xinhua quoted Huang as saying.
Neither the
statement nor the apology mentioned the sentencing of Reilly or other
officials.
Peter
Humphrey (2nd left) at the Number One People's Intermediate Court
in Shanghai
on August 8, 2014 (AFP Photo/People's Intermediate Court)
|
The verdict
comes more than a year after Chinese police first accused Reilly of ordering
employees to bribe hospitals, doctors and health institutions to gain billions
of dollars in revenue.
China's
healthcare sector is widely considered to be riddled with graft, partly the
result of an opaque tendering system for drugs, and also due to doctors' low
salaries.
GSK is the
most high-profile target of wide-ranging Chinese inquiries into foreign
pharmaceutical firms, as Beijing also mounts probes into overseas companies in
sectors ranging from cars to baby milk.
The
investigations come against the backdrop of an anti-graft campaign backed by
President Xi Jinping to root out official corruption.
Reilly is
not the only non-Chinese national to have been ensnared in the probe.
Last month,
a Shanghai court sentenced British investigator Peter Humphrey and his American
wife Yu Yingzeng to two-and-a-half years in jail for breaching privacy laws.
The
investigators had been hired by GSK to investigate the source of a lurid sex
tape of Reilly shortly before the probe went public.
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