China indicts U.S., British corporate investigators hired by GSK
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BEIJING - Chinese authorities have indicted British and American investigators hired by GlaxoSmithKline on charges of illegally obtaining and selling private information, state media reported Monday, as the Briton blamed the pharmaceutical company for misleading and using him.
Prosecutors in Shanghai filed charges of illegally obtaining and selling private information against British investigator Peter Humphrey and his wife Yingzeng Yu, a U.S. citizen, at the city's No. 1 Intermediate People's Court, the official Xinhua News Agency said. The move paves the way for the couple to stand trial.
The official Xinhua News Agency said it is the first time foreigners have faced such charges in China. Humphrey, 58, and Yu, 61, are part of an industry of investigators who help corporate clients screen potential partners and employees or watch for embezzlement and other employee misconduct.
WRAL TechWire coverage of GSK-China scandal:
The couple's arrest last year coincided with a Chinese investigation of accusations that GlaxoSmithKline (NYSE: GSK) paid bribes to doctors and officials to use its medications.
Glaxo said it hired Yu and Humphrey last year to investigate a security breach involving a top manager.
The indictment received prominent coverage in China. Reports by state broadcaster CCTV showed Humphrey and his wife being separately interviewed by Chinese reporters. In CCTV's footage, they were shown seated and wearing orange vests that are typical uniforms of detainees, as they spoke to reporters.
According to Xinhua, the couple are accused of illegally selling a "huge amount" of personal information on Chinese citizens, including home addresses, information about family members, details about real estate and vehicles and records of travelers entering and leaving the country.
The investigators are accused of obtaining such information by illegally buying it from others as well as with hidden cameras or by following people, Xinhua said.
Yu and Humphrey would compile the information gathered on the subjects of their investigations and sell the reports to clients that were mainly multinational companies based in China such as GSK China, the report said. They ran the Shanghai-based corporate intelligence and consulting firm ChinaWhys Ltd.
In Chinese media reports on Monday, Humphrey said he had been contacted in April last year by GSK's then-China manager, Mark Reilly, who wanted him to find out who leaked allegations of bribery at the firm to Chinese authorities and senior executives at the firm.
Reilly, who is British, is at the center of a major investigation into corruption in China's medical industry. In May, he was accused of leading a sprawling scheme to bribe doctors and hospitals to use GSK's drugs. Reilly's case has been turned over to prosecutors.
Humphrey said on state television that he found out during his investigation that the bribery claims were true and if he had known that earlier he would not have carried out the probe. Humphrey said he felt "betrayed and used" by the pharmaceutical firm.
In a written response to a request for comment, Glaxo cited a July 3 statement that said Humphrey and Yu's firm was hired in April 2013 to investigate "a serious breach of privacy and security related to" Reilly.
"They were not hired to investigate the substance of the allegations of misconduct made by the whistleblower," the company said in an email.
The British Embassy in Beijing said it was providing consular help to Humphrey and his family and have told Chinese authorities they would like to attend the trial, which the court has said will be closed. A trial date hasn't been announced yet.
"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," the embassy said in an emailed response to questions.
[GSK operates its North American headquarters in Research Triangle Park, N.C.]
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