Pharmaceutical giant GlaxoSmithKline announced today that a Chinese court found GSK’s China subsidiary guilty of bribery, and fined the company a record $489 million—the largest corporate penalty the country has ever imposed.

On Sept. 19, the Changsha Intermediate People’s Court in China’s Hunan Province found GSK China Investment (GSK China) guilty of bribing non-government personnel in order to obtain improper commercial gains. GSK China “resorted to bribery to boost sales of its medical products and sought benefits in an unfair manner,” the court statement read.

“[The firm] bribed, in various forms, people working in medical institutions across the country, and the amount of money involved was huge," the court stated. "Five senior executives actively organized, pushed forward and implemented sales with bribery.”

The court issued a jail sentence of three years with a four-year reprieve to Mark Reilly, the company’s former China head. Four other GSK executives received sentences of two to three years with reprieves, according to state news agency Xinhua. The verdict follows investigations initiated by China’s Ministry of Public Security in June 2013. 

In a statement, GSK stated that the illegal activities are “a clear breach of GSK’s governance and compliance procedures and are wholly contrary to the values and standards expected from GSK employees.” GSK added that it has cooperated fully with the authorities and has taken steps to comprehensively remedy the issues identified at its subsidiary, including:

Fundamentally changing the incentive program for its sales forces (decoupling sales targets from compensation);

Significantly reducing and changing engagement activities with healthcare professionals; and

Expanding processes for review and monitoring of invoicing and payments.

As Compliance Week previously reported, GSK could face additional enforcement actions by other agencies. The U.K. Serious Fraud Office has also opened “a formal criminal investigation into the group’s commercial practices,” the agency stated. GSK additionally faces a criminal investigation into possible violations of the Foreign Corrupt Practices Act.

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