Boston, MA 09/19/2014 (wallstreetpr) – GlaxoSmithKline plc (ADR) (NYSE:GSK) is set to pay for more than it allegedly illegally consumed in China. The $113 billion British pharmaceutical giant will have to part with nearly $500 million to settle claims of bribery that earned it about $150 million in revenue, BBC News reported in an article. GlaxoSmithKline apologized to the Chinese government and the people and also said it has learnt its lesson in the latest case.
GlaxoSmithKline’s corrupt business claims have been under surveillance for a little more than a year. However, the verdict is out, and it is an adverse one for the pharmaceutical giant. It admitted the claims of illegal promotion of its products whereby it is said to have offered bribes to doctors and hospitals to boost sales. Nearly $150 million was made in revenue through such irregular practices, but the company will pay nearly $500 million for the sin.
Huge market, high risks
The latest record fine to face a multinational company in China has also raised issues about the regulatory climate in the country. China has been enticing multinational players to invest their billions of dollars there and to take advantage of the huge market that it offers. However, regulatory atmosphere in China has become tight, and players like GlaxoSmithKline plc (ADR) (NYSE:GSK) that has been there for almost 100 years cannot avoid massive fines and the embarrassment that comes with such.
GlaxoSmithKline plc (ADR) (NYSE:GSK) apologized to the Chinese government and its people over its irregular business practices unearthed in the investigations that spanned more than a year. The company said it has learnt its lesson and hopes to turn a new chapter.
Rebuilding battered image
With the bribery issue out of sight, the company needs to keep a close eye on the fast-changing Chinese regulatory climate to avoid future impact. Moreover, GlaxoSmithKline plc (ADR) (NYSE:GSK) now has an opportunity to rebuild its tainted image. It needs to do that as a matter of urgency to win back trust in the market, especially because of the competitive nature of its industry.
