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By Adam Jourdan
SHANGHAI, May 16 (Reuters) - Corruption charges againstGlaxoSmithKline Plc executives in China are a warning toother foreign firms and could do irreparable damage to theBritish drugmaker's Chinese operations, the official Xinhua newsagency said on Friday.
Chinese police charged GSK's former China boss, Briton MarkReilly, and two other colleagues with corruption on Wednesdayafter a 10-month probe found the firm made billions of yuan frombribing doctors and hospitals.
Healthcare is a highly sensitive area in China and hasbecome a focal point for President Xi Jinping's attack oncorporate graft, with a number of global and Chinese drugmakerscoming under the spotlight for corruption.
"GSK's practices eroded its corporate integrity and couldcause irreparable damage to the company in China and elsewhere.The case is a warning to other multinationals in China thatethics matter," Xinhua said in an English-language editorial.
Xinhua's commentaries are often seen as reflective of thegovernment's thinking.
Officials at GSK in China did not immediately respond torequests for comment.
Britain's biggest drugmaker so far has not been charged withany crime although lawyers said that by charging Reilly, who wasGSK's legal representative in the country, authorities wereleaving the door open for a charge against the firm.
Any bribery charges against GSK could mean the cancellationof its business licenses, crippling its operations in a majorgrowth market for Western pharmaceutical giants.
GSK could also incur huge fines, while Reilly himself - whosources say was caught off-guard by the allegations - facesdecades in jail if the charges are upheld as expected.
Lawyers said the charges were the most serious corruptioncase against a major multinational firm and a senior expatriateexecutive in China's history, and are a wake-up call for otherforeign firms in the country.
Foreign firms in China are firming up compliance efforts inthe wake of the GSK investigation, executives and lawyers said.
The last major corruption scandal to hit a foreign companyin China involved miner Rio Tinto in 2009,which resulted in four executives including a Chinese-bornAustralian being jailed for between seven and 14 years. (Reporting by Adam Jourdan; Editing by Kazunori Takada andStephen Coates)
