The London-based multinational drugmaker, also known as GSK, supplies key products such as vaccines in China, as well as drugs for lung disease and cancer. In 2013, the company was targeted by Chinese authorities over alleged corruption, price-fixing and quality controls.
British investigator Peter Humphrey jailed for 2.5 years for buying private data
Patrick Boehler and Daniel Ren
A year after their detention sent shockwaves through China's booming due-diligence industry, British corporate investigator Peter Humphrey was sentenced last night to two-and-a-half years in prison and his wife, Yu Yingzeng, to two years.
The Shanghai No 1 Intermediate People's Court also fined Humphrey 200,000 yuan (HK$250,000) and Yu 150,000 yuan for illegally obtaining private information on Chinese citizens after the one-day trial.
Humphrey will be deported after serving his jail term.
After the sentence was handed down, the couple's 19-year-old son, Harvey, made a brief statement outside the court.
"I'm very sad about the court's verdict but I hope the authorities will take into account their poor health," he said.
The couple's representatives did not say if they would appeal against the decision.
Humphrey had admitted he had been paying contractors for the private information for almost a decade.
Humphrey, 58, and Yu, 61, both acknowledged using "illegally obtained private information" for due diligence reports in the nine years they ran the ChinaWhys risk consultancy in Shanghai and Hong Kong.
However, they put up a defiant defence, telling the court that they did not know it was illegal to hold information such as identity records, phone numbers and overseas travel records on hard drives in their Shanghai office. "Had I known it was illegal, I would have destroyed it," Yu said, according to transcripts the court posted on its Weibo page.
"I have lived abroad for a very long time. My US phone number and address can be found in the yellow pages. It is very easy in the US to find such information."
The Post could not independently verify the accuracy of the online statements.
The couple's prosecution for conducting an illegal investigation was the first in China in which the defendants were foreign nationals.
About half of an estimated 700 due diligence reports ChinaWhys compiled between 2004 and last year for foreign and domestic clients contained elements of private information, Humphrey said in his testimony.
But both Humphrey and Yu stressed that such personal information was only a minor part of their overall due diligence investigations. Changes to China's criminal law in 2009 made trading in private information a criminal offence.
Shortly before their detention, pharmaceutical giant GlaxoKlineSmith (GSK) had asked the couple to investigate the origin of a sex tape. It showed Mark Reilly, the head of GSK's China division, having sex with his girlfriend. Along with the tape came allegations that GSK bribed Chinese doctors. The same allegations were shared with Chinese authorities in anonymous emails.
Chinese authorities have not officially connected the trial to the graft probe, but Humphrey has linked the investigation with his own arrest. He said the company misled him on the seriousness of the allegations.
Humphrey and Yu investigated Vivian Shi, the former head of government affairs for GSK in China. GSK had fired Shi, the daughter of a Shanghai municipal government official, in 2012 for falsifying travel expenses. Shi has denied wrongdoing.
Following an international investigation into the bribery accusations, GSK said it had found evidence of wrongdoing.
Reilly has since been dismissed from his position and is assisting the Chinese investigation into the bribery of doctors. He is in China and barred from leaving the country.
In May, the Ministry of Public Security said it had completed its investigation into the accusations and passed the case to prosecutors in Hunan province. Reilly, along with two local executives, paid bribes to law enforcement officials, doctors and hospitals, police said at the time. The GSK executives then systematically covered up their actions, police said.