World Bulletin/News Desk
China has fined GlaxoSmithKline Plc a record 3 billion yuan ($488.8 million) for paying bribes to doctors to use its drugs, the British company said on Friday, drawing to a close a corruption probe that rocked the pharmaceutical sector in China.
However, Briton Reilly will be deported and will not face jail time in China, a source with direct knowledge of the case said.
"Reilly will be deported so he won't be in detention in China," said the source, who declined to be named because of the sensitivity of the case.
The verdict, handed out behind closed doors in a single-day trial according to Xinhua, is the culmination of a Chinese probe into the British drug maker which Chinese authorities made public in July last year.
Chinese police said then that the firm had funnelled up to 3 billion yuan, exactly the same amount as the fine, to travel agencies to facilitate bribes to doctors and officials.
GSK said the activities by the firm's China unit were a "clear breach" of GSK's governance and compliance procedures.
"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 CEO, Andrew Witty, said in the statement.
The case is the biggest corruption scandal to hit a foreign company in China since the Rio Tinto affair in 2009, which resulted in four executives, including an Australian, being jailed for between seven and 14 years.
The judgment on Friday took many people by surprise, partly because Chinese authorities did not make the date of the trial public in advance. Police handed proposed charges to the country's prosecutors in May.
Under Chinese criminal law, bribery by a corporate unit can lead to a large fine and jail sentence for the unit's head.
"GSK Plc has reflected deeply and learned from its mistakes, has taken steps to comprehensively rectify the issues identified at the operations of GSKCI, and must work hard to regain the trust of the Chinese people," GSK said in a written apology.
Future commitments include investment in Chinese science and improved access to medicines across the country through greater expansion of production and flexible pricing, it said.
Shares in the company were slightly higher on Friday, despite the Chinese news, as the market took the penalty in its stride. A fine had been widely expected and the $489 million hit will be relatively manageable for a company with a market value of $113 billion.
"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," said Mick Cooper, analyst at Edison Investment Research in London.
GSK faces investigations into its overseas practices by U.S. and British authorities. Those investigations continue and could result in further penalties for the group.
The International Monetary Fund was going to be "attentive" to the consequences of the reform, which notably includes a sharply lower corporate tax rate, she told French radio station France Inter.
More than 9,000 new companies established in January, according to major business body
Company reaches settlement with EPA following investigation started in 2014
BIST 100 rises 0.51 percent; USD/TRY exchange rate drops to 3.7660
The European aircraft maker said in a statement that net profit nearly tripled to 2.87 billion euros ($3.6 billion) in 2017 from 995 million euros a year earlier.
BIST 100 rises 1.05 percent; USD/TRY exchange rate drops to 3.7820
Saudi Aramco's crude output in March will be 100,000 barrels per day (bpd) below its February level while exports will be kept below seven million bpd, the energy ministry said.
Turkish Central Bank says annual deficit rose to $47.1B in 2017
The figure follows up growth of 0.9 percent in the first quarter of 2017, 0.6 percent in the second, and 0.7 percent in the third -- all adjusted for price, seasonal and calendar effects.
BIST 100 rises 0.73 percent; USD/TRY exchange rate drops to 3.8040
Consumer Prices Index 12-month rate at 3 percent in January 2018, unchanged from December 2017
BIST 100 rises 0.43 percent, while USD/TRY exchange rate drops to 3.7980
Turkey has produced over 1.1 million tons red meat in 2017, TurkStat says
BIST 100 rises 0.88 pct; USD/TRY exchange rate falls to 3.80 while EUR/TRY exchange rate stays at 4.68
Olaf Scholz, of the Social Democratic Party (SDP) that this week struck a deal to reform Germany's so-called grand coalition government with Chancellor Angela Merkel, said Germany "doesn't need to dictate to other European states how they run themselves".