British fraud investigator linked to drugmaker GSK is arrested in Shanghai

Fraud investigator Peter Humphrey, who had worked for drug giant, held in Shanghai

PUBLISHED : Monday, 22 July, 2013, 12:00am
UPDATED : Monday, 22 July, 2013, 2:37pm

A British fraud investigator who had worked with pharmaceutical firm GlaxoSmithKline (GSK), which is being investigated for alleged bribery on the mainland, has been arrested, according to reports yesterday.

Peter Humphrey, founder and managing director of the risk management consultancy ChinaWhys, was arrested on July 10 in Shanghai, according to Dow Jones Newswires, which quoted unidentified sources.

Humphrey's clients included GSK, according to the report.

Police have accused GSK of bribing officials and doctors to boost sales and raise the price of its medicines on the mainland. The drugmaker allegedly transferred up to three billion yuan (HK$3.76 billion) to 700 travel agencies and consultancies over six years to organise the bribes.

A spokesman for GSK, Britain's biggest drugmaker, declined to confirm if it had employed Humphrey as a contractor, Dow Jones said.

"We are aware of the arrest of the British national in Shanghai in China on July 10," a British Foreign Office spokesman said. "We are providing consular assistance to the family."

Details of the arrest were not known.

It was unclear whether he had been charged or had retained a lawyer, Dow Jones reported.

ChinaWhys' Shanghai office did not respond to phone calls and e-mails from the South China Morning Post.

According to the company website, ChinaWhys "provides creative approaches to critical business problems in China".

Humphrey has spent 27 years involved with China and Eastern European countries. He has been involved with risk management and detective services since the late 1990s after spending two decades as a foreign correspondent with Reuters in Asia, Eastern Europe and the Balkans, according to the information on ChinaWhys website.

The mainland has already detained four senior Chinese executives and banned GSK's finance chief in China, Steve Nechelput, from leaving the country.

Last week, GSK chief executive Andrew Witty sent its head of emerging markets and two other executives to the mainland to address the crisis and help authorities get to the bottom of allegations it has called "shameful".

Although an internal company investigation has yet to conclude, people familiar with the matter said yesterday that Witty would discuss what may have gone wrong in the scandal when he presents quarterly results on Wednesday.

“He will give his perspective on what appears to have gone on and how it can be put right,” one of the sources said.

Authorities have extended their investigation to other drugmakers working on the mainland. Belgian drugmaker UCB said last week its Shanghai office had been visited by officials from the State Administration for Industry and Commerce seeking information on compliance.

Agence France-Presse, Reuters