Monday 18 December 2017

Couple hired by Glaxo due to face charges of illegally obtaining private information

GlaxoSmithKline (GSK)
GlaxoSmithKline (GSK)

A British investigator and his American wife who were hired by UK drugs giant GlaxoSmithKline are to face trial in China charged with illegally obtaining and selling private information.

Prosecutors in Shanghai have filed charges against Peter Humphrey, 58, and Yingzeng Yu, 61, the official Xinhua news agency said.

The couple's arrest last year coincided with a Chinese probe into allegations that Glaxo staff had funnelled hundreds of millions of pounds through travel agencies to bribe doctors and health officials to boost sales and raise prices.

Their trial, reportedly due to take place next month, will be behind closed doors but the Foreign Office said it was pressing China to allow UK embassy staff to attend.

The latest development in the saga saw Mr Humphrey and his wife appear wearing orange vests on state broadcaster CCTV.

They are accused of obtaining information on Chinese citizens by illegally buying it from others, as well as with hidden cameras, or by following people

It is said that the couple, who ran the Shanghai-based corporate intelligence and consulting firm ChinaWhys, compiled information for reports to clients that were mainly multinational companies such as Glaxo.

In media reports from China today, Mr Humphrey said he had been contacted in April last year by Glaxo's China manager Mark Reilly who wanted him to find out who had leaked bribery allegations to Chinese authorities and senior Glaxo executives.

It has also been reported that the investigators were looking into the origin of a sex tape involving Mr Reilly - who has himself been accused by Chinese authorities in relation to the bribery claims.

Mr Humphrey said on state television that he found out during his investigation that the bribery claims were true, and that he felt "betrayed and used" by Glaxo.

A Foreign Office spokesman said: "We are aware of Mr Humphrey's case and are continuing to provide consular assistance to him and his family.

"Although the court has announced that it will be a closed trial, we have made clear to the Chinese authorities that we would like Embassy staff to attend the trial and the need for a transparent and fair process. We will continue to do this."

Glaxo had yet to respond to a request for comment.

Glaxo said in a statement earlier this month that ChinaWhys was hired in April last year "to conduct an investigation following a serious breach of privacy and security related to the company's China general manager".

But it said the firm was not hired "to investigate the substance of the allegations of misconduct" that had been made by a whistleblower.

The statement also said: "The issues relating to our China business are very difficult and complicated."

Glaxo said it had conducted investigations over several months after allegations made in early 2013 and that "some fraudulent behaviour" relating to expenses claims had been identified, resulting in "employee dismissals and further changes to our monitoring procedures in China".

But it said the inquiry had not found evidence to substantiate specific allegations in whistleblower emails

Glaxo said it was fully cooperating with the Chinese investigation and had hired an external law firm, Ropes and Gray, to conduct an independent review.

"We have zero tolerance for any kind of corruption in our business and we have many policies, procedures and controls in place to monitor this and take action against any breaches," the statement said.

"As we have said previously, the allegations that have been raised are deeply concerning to us. We are learning lessons from this situation and we are determined to take all actions necessary as a result."

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