Category: Peter Humphrey GSK

Ex-Sleuths Sue GSK Over Imprisonment In China…


Interesting story from Reuters-

http://www.reuters.com/article/us-gsk-china-lawsuit-idUSKBN13B268

 

Ex-sleuths sue GlaxoSmithKline over imprisonment in China

Two former corporate investigators have sued GlaxoSmithKline, alleging the drugmaker misled them and induced them to investigate an innocent person, resulting in their imprisonment.

The complaint, filed with the U.S. District Court in Philadelphia and made public on Wednesday, was brought by Peter Humphrey, who is British, and his American wife, Yu Yingzeng.

The couple were detained in 2013 and found guilty by a Chinese court in 2014 after being asked by GSK to investigate a whistleblower within the pharmaceuticals group.

They were convicted of illegally obtaining private records of Chinese citizens.

The couple allege GSK misled them by stating that the whistleblower’s allegations of widespread corruption within the company were false. GSK was fined a record 3 billion yuan ($436 million) in 2014 for paying bribes to doctors to use its drugs.

A GSK spokesman said: “We do not believe this case has any merit and will vigorously defend against the allegations.”

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Peter Humphrey : UK banks blacklist Briton jailed by China..


https://www.ft.com/content/89208d9a-979a-11e6-a80e-bcd69f323a8b

UK banks blacklist Briton jailed by China

HSBC and RBS pull services from private investigator Peter Humphrey

Peter Humphrey © CCTV News

 

A British private investigator jailed in China after GlaxoSmithKline’s bribery scandal has been blacklisted by banks, including HSBC and Royal Bank of Scotland, after authorities helped bring him back to the UK.

Peter Humphrey, who was convicted after a closed-door trial in 2014 of illegally obtaining information on Chinese citizens, told the Financial Times that HSBC had withdrawn his personal and business accounts without explanation on his repatriation last year after a decades-long relationship. RBS’s offshore arm, with whom he had banked since 2012, also pulled services.

While the banks declined to comment to the FT on specific cases, Mr Humphrey believes that the reason they closed his accounts was because of a confidential database used by 49 of the world’s 50 biggest banks, including HSBC and RBS.

World-Check, owned by Thomson Reuters, is used by banks, law firms and government agencies to research individuals and go through sanctions lists. Banks use it as part of their “know your client” checks, or KYC for short, that they must carry out as part of anti-money-laundering rules.

But detractors allege that the database serves as an unaccountable blacklist, aggregating unverified blogs and newspaper articles, including some from state-sponsored sources, as well as court judgments from around the world.

The database’s own fine print states that it provides merely a snapshot that “should be read by users in the context of the fuller details available in the external sources provided” and cautions their customers to verify the information. Individuals can request changes to inaccurate information.

World-Check said in a statement that it aggregated information from government watch lists and sanctions databases, as well as “publicly available information from reputable sources in order to help clients comply with anti-money laundering and counter-terrorist financing regulations. Customers can then use this data to follow their own regulatory compliance policies and procedures.”

HSBC said in a statement: “HSBC has a moral and regulatory obligation to have systems and controls in place to manage financial crime risk. As part of managing this risk, we periodically review our customer relationships and in doing so we gather information from a wide range of sources and take a number of factors into consideration.”

RBS declined to comment.

An insider at one high-street bank said that while cross-checking might occur for potentially lucrative new customers, a red flag for anyone else would be enough to terminate any relationship.

World-Check’s results for Mr Humphrey, seen by the FT, group him with GSK and its former employees charged with bribery, even though he was not part of that investigation. The records go on to state that he was arrested then subsequently jailed “for alleged illegal trafficking of personal information”.

“That is erroneous and injurious; there was no ‘trafficking’ or buying and selling of information. We produced in-depth reports,” said Mr Humphrey. “The database also equates the validity of convictions in a country like China with those of countries with a long rule of law.”

Mr Humphrey and his wife were detained by Chinese authorities in 2013 after helping GSK, which was not mentioned during their trial, identify the source of a secretly filmed sex tape of its then top executive in China in bed with his girlfriend.

GSK was fined £300m in 2014 by a Chinese court for funnelling billions of renminbi to hospitals, doctors and officials in an attempt to boost sales in one of the world’s biggest and fastest-growing drug markets. The company remains under investigation by the UK’s Serious Fraud Office.

Mr Humphrey is not the only person to take issue with the database. Maajid Nawaz, a former Liberal Democrat candidate and co-founder of an anti-extremist think-tank, was incorrectly labelled by World-Check as having terrorist links. He has now instructed Mark Lewis at Seddons, the solicitor used by celebrities and other victims of the phone-hacking scandal, to pursue a claim against the company.

Iqbal Asaria, an academic and former Bank of England adviser on Islamic finance who was made a CBE in 2005, was also erroneously labelled as having links to terrorism on the database after it picked up unsubstantiated allegations on a blog.

Thomson Reuters declined to comment on any specific case, citing data privacy laws. The FT competes with the company in providing news.

Banks have taken a conservative approach to KYC since US authorities in particular started cracking down on money-laundering. HSBC is especially sensitive since it was landed with a $1.9bn fine in 2012 from the US Department of Justice. It has taken a cautious approach and has closed entire business lines if they are deemed too risky.

But regulators are concerned that banks have taken “de-risking” too far, shutting out charities, innocent individuals, or indeed whole countries, deemed by banks to be too dicey.

According to a report published this year for the Financial Conduct Authority, banks have severed ties with clients they deem risky at an accelerated rate over the past three years in response to stretched compliance teams and a reduced appetite for risk in the wake of fines.

Copyright The Financial Times Limited 2016. All rights reserved. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.

What is the GSK China Bribe Scandal Really About?


https://truthman30.wordpress.com/2013/09/12/gsk-rotten-to-the-core/

“Why did Chinese authorities choose GSK? Such corruption is common practice in Chinese pharmaceutical companies, partly due to low salaries for doctors. The Chinese authorities appear to be holding onto the affair tightly, leading to speculations of political motives.

These speculations have arisen from the company’s links with Betsy Li Heng, a former director of GSK’s corporate affairs. Li’s two brothers, Hu Deping and Hu Dehua, have long been advocating political reform – going so far as to criticise President Xi. This is almost unheard of amongst Chinese officials and intellectuals, and the scandal could be a warning for them”


nohttp://qz.com/108402/glaxosmithklines-bribery-scandal-in-china-might-actually-be-about-shutting-up-political-reformers/t to overstep the mark.

GlaxoSmithKline’s bribery scandal in China might actually be about shutting up political reformers

“The theory floating around Beijing political circles and in internet postings is that when China’s top leaders were deciding which pharmaceutical company to go after, they settled on GSK because they could achieve two goals simultaneously. Not only have they warned the drug industry to clean up its act; they have also sent a message to the Hu family to pull their necks in. According to this theory, the real targets of the crackdown on GSK are two of Li’s brothers, Hu Deping and Hu Dehua, both of whom have been outspoken advocates of political reform.”


http://blogs.ft.com/beyond-brics/2013/07/25/gsk-corruption-and-the-byzantine-world-of-chinese-politics/

GSK, corruption and the Byzantine world of Chinese politics

 

“When asked whether GSK believes the ongoing bribery and corruption investigation is related to elite Communist party politics, a spokesperson declined to comment beyond confirming that Li had worked for the company from the mid-1990s until 2007.

Adding to suspicions that an orchestrated smear campaign is targeting the Hu family, a series of anonymous internet postings claiming that Hu Deping owns at least one luxury apartment in central Beijing have also appeared in recent weeks.

Hu has denied that he owns the apartments.

Last week, allegations of “suspected massive corruption” were levelled by a senior state-employed journalist against a major state-owned conglomerate that previously employed another Hu Yaobang son, Liu He.

Liu was vice-chairman of Hong Kong-listed China Resources Group, the company named in the allegations, until his retirement in 2005. His retirement pre-dates the alleged corruption.

There has been a string of whistle-blowers exposing official corruption in recent months but it remains extremely rare in China for journalists at state media organizations to make such public accusations.”


http://eeo.com.cn/ens/2013/0731/247588.shtml

“Major web portals have also linked to a story about a statement that is said to have been authored by Betsy Li Heng, the daughter of former Chinese Communist Party leader Hu Yaobang. The statement, which was posted to a Weibo account, refutes rumours about her private life and clarifies her association with GlaxoSmithKline. (SCMP)”


http://www.scmp.com/news/china-insider/article/1293303/hu-yaobangs-daughter-denies-allegations-wrongdoing-online

Former Party leader Hu Yaobang’s daughter denies allegations of wrongdoing

PUBLISHED : Wednesday, 31 July, 2013, 12:09pm

The allegations are the latest in a series of adverse reports circulating online on the offspring of the reformist party elder, whose death triggered the Tiananmen protests in 1989.

http://www.scmp.com/news/china-insider/article/1293303/hu-yaobangs-daughter-denies-allegations-wrongdoing-online

A photo of Li Heng shared on Sina Weibo on Wednesday.

In the statement, which first appeared on Monday, Li reportedly denied she had business dealings with GSK after leaving the company six years ago.

Li served as director of GSK’s corporate affairs in its Beijing office from the mid-1990s to 2007. Her departure from the company predates the alleged acts of bribery by the company in China.

Li also denied she had a daughter who was studying in Britain. “Ms Li Heng does not have a daughter,” the statement reads. “Rumours are a tool to hurt people.”

The unsigned statement, which could not be independently verified, is dated July 27 and was first shared on the official Sina Weibo account of KDNet, a popular forum for political debate, on Monday.

Li, who adopted her mother’s surname, also said she and her husband Liu Xiaojiang did not own luxury villas in Beijing downtown and in the Xiangshan mountains west of Beijing, as claimed in online posts. Photos of a purported residence had circulated online earlier in July.

Her brother Hu Deping, a member of the Chinese People’s Political Consultative Conference, also dismissed online allegations of owning a luxury property in Beijing, which appeared around the same time.

Hu said that his father’s descendants had nothing to hide, but the publication of the family assets should be made in an orderly manner.

At the same time, Xinhua journalist Wang Wenzhi accused China Resources, a Hong Kong-listed company, of “massive corruption”, in a rare exposure by journalists of the state-run news agency.

Observers noticed that Li’s other brother Liu Hu served as a former deputy general manager and executive board director for the company until his retirement in 2005.

For Wang Jiangsong, a philosophy professor at the China Institute of Industrial Relations in Beijing, these attacks have been orchestrated by opponents of the Hu family.

“It is probably extreme conservatives trying to blacken their names,” he said.

Days ahead of the leadership transition in the Communist Party in autumn, Hu’s eldest son Hu Deping wrote an open letter calling for reform and for policies that conform more to the country’s constitution.

“Constitutional rule is an abhorrence to both [the Communist Party’s] extreme right and left wing,” said Wang. “The Hu family represents healthy forces within the party.”

“The influence and appeal of them openly parading the banner of constitutionalism is no trivial matter,” he said. “Therefore, they had to be politically ruined and discredited among the people.”

Among the four hundred people who have commented on the statement on microblogs, many have expressed similar suspicions about a smearing campaign and expressed support for the family. Some have questioned the veracity of the statement.

Hu Deping could not be reached for immediate comment.

GSK China-gate: Peter Humphrey and Partner, Yu Yingzeng, Jailed in China


http://fiddaman.blogspot.co.uk/2014/08/gsks-hired-detectives-day-one-as-it.html

Friday, August 08, 2014

GSK’s Hired Detectives – Day One, As It Happened

**UPDATED**

11.00pm: The court sentences Humphrey to two years and six months in jail on charges of “illegally obtaining private information”, a fine of 25,000 yuan, and deportation from China.

11.05pm: The court sentences Yu to two years and in prison on charges of “illegally obtaining private information”, and a fine of 15,000 yuan.

11.07pm: The couple has five days to appeal this verdict. Court is adjourned.

No mention of GSK throughout the trial.

What is striking though is…

3.34pm: Yu’s lawyer asks Yu whose personal information she had obtained. The presiding judge interjects that such this has been dealt with at a pre-trial hearing. If these names are to be named again, then the current hearing could not be public, the judge says.

Looks like GSK’s lawyers may have been working behind the scenes.

Here’s a summary transcript of today’s events.

Courtesy of The South China Morning Post.

Back stories at foot of transcript.

8.45am: A prison van carrying Humphrey and Yu arrived at the court on Hongqiao Road

9.31am: The hearing begins, the court says on its Weibo account.

10.02am: Their son Harvey Humphrey, 19, is in the court room along with consular officials. Last month, Chinese authorities backtracked on plans to hold the trial in secret.

10.11am: The presiding prosecutor says Humphrey and Yu were criminally detained on July 11, 2013, and formally arrested on August 16, 2013.

10.16am: Prosecutor: between April 2009 and July 2013, the two defendants obtained 256 items of information including identity documents, travel records, mobile phone numbers from three Chinese sources, who are facing separate investigations. They paid between 800 and 2,000 yuan per piece of information and resold the information to foreign and domestic clients.

10.43am: Prosecutor questions Humphrey: “Are the facts as laid down in the charges against you accurate?” Humphrey replies: “In general, they look correct, but as for the charges, I don’t understand Chinese law, I am therefore not in a position to comment.”

Prosecutor asks again if Humphrey has objections to the charges. Humphrey says he does not object to the charges.

10.52am: Questioned by the prosecution, Humprey explains how he first registered ChinaWhys as a company in Hong Kong in late 2003 and then in May 2004 established his Shanghai-based firm, Shelian.

10.54am: Humphrey explains that he had chose a different name for his Chinese company because the Industrial and Commercial Administration in Shanghai did not approve ChinaWhys as the company’s name.

10.56am: Humphrey lists the services he provided to clients.

10.57am: He said he provided background investigations on companies and potential hires for clients.

10.58am: He also researched industries to help clients understand the business environment and evaluated clients’ employees, partners, suppliers in situations potentially involving corruption of fraud.

11.00am: Humphrey: “Sometimes clients would raise requests we can’t handle ourselves, and we would look for companies which could accomplish it for clients.”

11.01am: Humphrey: “In general, our services are to help reduce risks, especially in terms of fraud and corruption, for our clients.”

Humphrey testifies in English. Quotes are translated from the court’s Chinese-language transcript.

11.10am: Humphrey says he has worked for several hundred clients between 2004 and 2013.

11.14am: Humphrey lays out how he investigated for clients: internet searches, information provided by clients, interviews, on-site inspections. If that information proved to insufficient, he says he contracted other companies to obtain information, but such information accounts for a very small part of his services to clients.

11.15am: The prosecutor asks Humphrey if he had bought large amounts of citizens’ individual information. Humphrey says he contracted other companies to provide such information, paying them a service fee.

11.20am: The prosecutor asks Humphrey why his testimony differed from what he told police earlier over the price of individual pieces of information. Humphrey says he never told police the exact price of each piece of information he had obtained.

11.23am: The prosecutor asks Humphrey whether he has ever tailed or monitored a citizen. Humphrey says he has never provided such services. He says he has helped clients find Chinese companies that could provide such services.

11.25am: Humphrey says the English word “monitoring” covers a wide range of activities including reading news reports.

11.28am: Prosecutor asks if Humphrey posed as a family member or client to interview target companies. He says he had sometimes used aliases in field investigations or telephone calls.

11.30am: Humphrey says he made sure facts, analysis and conjecture were clearly differentiated in his reports to clients.

11.34am: The prosecutor asks whether Humphrey recalled a project called “Blackthorn”.

11.36am: Humphrey is asked whether he paid to obtain a target’s mobile phone records while conducting the “Blackthorn” project conducted for a Finnish company.

11.42am: Humphrey says he could not remember whether he paid for information in this particular case. He says he acquired information from Zhou Hongbo and Liu Yu about a target who worked in Shandong and travelled frequently to Hong Kong. The client wanted to know what the target was doing in Hong Kong and what assets the target had in the territory. Humphrey says he commissioned another company in this case.

11.49am: Prosecutors ask Humphrey about an “Operation Clown” and “Operation Goose” for two German clients. He replies that he remembers these projects, but struggles to recall details.

11.50am: Prosecutors ask Humphrey whether he and his wife have paid for 256 items of information provided by Liu Yu, Cai Zhicheng, and Zhou Hongbo. He says he doesn’t recall specific numbers but says it is possible they have used these services for as many times.

11.52am: Humphrey says he would call the three individuals, each of whom runs their own company, and pass on targets’ names. In the beginning they would provide reports, but later they became more and more lazy, says Humphrey.

11.54am: Information provided to him included targets’ identity and residency information, information on their family members, overseas travel records and mobile phone records.

11.56am: Humphrey says he and, his wife Yu and a former foreign employee have all contacted these three individuals.

12.00pm: Asked by prosecutors, Humphrey says he paid for such private information. He says he saved much of that information on his hard drives. He says all of his company’s financial matters were handled by his wife.

12.01pm: Humphrey says he was aware that he had obtained private information from citizens after 2009, when a new law on the secrecy of private information was enacted.

12.04pm: Prosecutors ask Humphrey whether he changed his work tactics when Liu Yu was detained. Humphreys says he had learned in March 2013 that Liu had gotten into trouble. He says he gradually changed his company’s operations, but had not completed the changes by the time he was himself detained later in the year.

12.06pm: Prosecutors ask Humphrey whether he thinks that private information could be freely sold on the market. Humphrey says he has never engaged in the business of trading private information.

12.10pm: Prosecutors ask Humphrey how much he charged for his reports. Humphrey says the price depended on the amount work the reports required and that his earlier statement saying reports cost between 40,000 and 50,000 yuan was just an approximation.

12.17pm: Prosecutors ask Humphrey about one report for which he charged 2.64 million yuan and used nine elements of private information. Humphrey says he spent almost a year working on the project.

12.18pm: Prosecutors ask Humphrey if he was detained by Shanghai police in his office. Humphry affirms. The prosecution ends its questioning of Humphrey.

12.21pm: Humphrey’s defence team is now questioning him.

12.22pm: Humphrey says his company’s business model has not changed much since he started the company in 2004. Internal graft and corruption increasingly became a focus of his inquiries, he says. He adds that over the last years he increasingly relied on interviews and public information.

12.26pm: Humphrey says 700 is a correct approximate estimate of the number of reports he produced for clients since 2004. He says he only started a numbered filing system in 2005.

12.28pm: Humphrey says he estimated about half of his reports contained some private information.

12.31pm: Humphrey says companies approached him to investigate their suspicions for fraud and graft. He says 90 per cent of such allegations proved correct.

12.33pm: Humphrey says he needed personal information to verify the identity of targets as, for example, company shareholders and to check whether they had conflicts of interests in their business dealings. He also needed the information to prove that targets were in contact with certain other individuals.

12.37pm: Humphrey says Liu Hong, Cai Zhicheng and Zhou Hongbo run their own companies and that he had now way of auditing their operations.

12.41pm: A defence lawyer asks Humphrey whether he paid for services or private information from Liu Hong, Cai Zhicheng and Zhou Hongbo. Humphrey says he paid for services. They provided him with feedback and additional information, he says.

12.45pm: A defence lawyer asks Humphrey whether he knew where the private information he paid for came from. Humphrey says he did not know how the information was obtained. He says he was aware that law firms could obtain some information.

12.47pm: The court directs a defence lawyer for his wife Yu Yingzeng to ask Humphrey questions. The lawyer asks Humphrey about his typical clients.

12.47pm: Humphrey says most of his clients were large or medium-sized companies. Most were foreign companies, but some were Chinese. They operated in manufacturing and finance or were law firms, he says.

12.48pm: These companies hired him to investigate merges, the hiring of senior executives and corrupt practices of employees, he says.

12.51pm: The court rests until 1.30pm.

1.33pm: The court hearing resumes.

2.07pm: Yu’s defence lawyer asks Humphrey whether clients transferred his commissions to his private or to a company bank account. Humphrey says the commissions were transferred to the company’s bank accounts, either in Hong Kong or Shanghai.

2.14pm: Yu’s lawyer asks Humphrey when he actually tailed a target. Humphrey says he never tailed targets, but, in rare cases, commissioned another company. In one such case, Operation Blackthorn, he proved that a Finnish company’s general manager was defrauding the company and saved it from incurring tens of millions of US dollars in damages, he says.

2.16pm: Judges now direct questions to Humphrey.

2.18pm: A judge asks Huphrey whether he consulted his wife Yu over each decision to obtain private information. Humphrey says they sometimes discussed what kind of information they should try to obtain.

2.20pm: A judge asks Humphrey whether he had signed contracts with the companies that provided him with personal information. Humphrey says he did not sign contracts for individual assignments, but had signed framework contracts relating to secrecy and conflicts of interest.

2.23pm: Humphrey says he did not use every bit of private information in his reports for clients. Some elements of private information helped him as background knowledge when compiling such reports.

2.24pm: Yu Yingzeng is now called to testify.

2.38pm: The presiding judge asks Yu whether she has clearly heard and understood the charges brought against her. She says she has heard and understood every word of them.

2.42pm: Asked whether the charges are accurate, Yu says she would like to clarify two points: Firstly, the price of 800 to 2,000 yuan for piece of information is only an approximation. Secondly, they did not sell public information, but used it to create reports. She says they have never bought information for their own benefit.

2.45pm: The prosecution asks whether Yu had problems when she registered their company in Shanghai, Shelian. Yu says they tasked an agency to handle the paperwork. She says she had no problems in the registration process.

2.48pm: The prosecution asks Yu whether they had compiled about 700 reports. Yu affirms, but says some reports were also compiled abroad.

2.48pm: Asked by prosecutors, Yu admitted to using citizens’ private information.

2.49pm: Prosecutors ask Yu about the origin of this information. Yu says until 2009 they obtained information from Zhou Hongbo, from 2009 until 2011 from Liu Yu and most recently from Cai Zhicheng.

2.50pm: Yu says she never tried to bargain down the cost of information.

2.55pm: Yu says she never knew that the information she obtained was illegal. She says because she did not know the information’s origin, she could not have committed a crime. She says she was not aware that obtaining such information was illegal in mainland China, when it possible to legally obtain the same information in Hong Kong. If she had known she was acting outside the law, she would have destroyed all evidence, she argues.

2.59pm: Yu says 90 – 95 per cent of the information she obtained from Liu Yu, Zhou Hongbo and Cai Zhicheng related to targets’ identity and residency. Phone and overseas travel records have only become recently available, she says.

3.02pm: Yu says only she and her husband knew about Liu, Zhou and Cai’s identities. Prosecutors ask whether she had to go through these agents to obtain information because the information she needed was not publicly available.

3.05pm: Yu says the prosecutor’s assumption is incorrect. She says she knew that Zhou Hongbo was a lawyer and that lawyers could obtain information. She says she did not know how Liu and Cai obtained their information.

3.07pm: “We did not know obtaining these pieces of information was illegal in China”, says Yu.

3.07pm: “Do you think it would touch your privacy if your husband’s or son’s private information was sold and bought?”, asks the prosecutor.

3.09pm: “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,” replies Yu.

3.10pm: Yu says she only rarely assigned another company to tail a target. “95 per cent of our employees’ work was done in the office, investigating online,” she said.

3.14pm: Prosecutors ask Yu whether she has ever impersonated a client, an investor or a relative of a target to obtain information.

3.15pm: Yu says they have pretended to be business contacts.

3.16pm: Asked by prosecutors, Yu says they charged clients between 20,000 and 200,000 for individual reports.

3.17pm: Asked by prosecutor show she paid Liu, Cai and Zhou, Yu says she wants to clarify that she they mostly provided company records. She then says she sometimes transferred their commissions to their private accounts in Hong Kong or the mainland.

3.29pm: The prosecution ends its questioning of Yu.

3.30pm: Yu is now questioned by her own defence lawyer. When asked, Yu says she emigrated to the US in 1981 aged 28. She returned to China in 1999.

3.34pm: Yu’s lawyer asks Yu whose personal information she had obtained. The presiding judge interjects that such this has been dealt with at a pre-trial hearing. If these names are to be named again, then the current hearing could not be public, the judge says.

3.36pm: Yu’s lawyer asks her whether the information she acquired was generic or targeted towards certain people. Yu says she acquired information to prevent and deal with internal corruption in companies and not use this information for individual profit.

“We helped clients solve problems that public security organs could now solve, making them more transparent and open,” she says.

3.42pm: Yu’s lawyer asks her what kind of information she obtained. Yu says 90 – 95 per cent of information was identity and residency information, which, she says, was required to find out whether a client’s employee used a relative to open their own company.

3.44pm: Asked whether every report contained private information, Yu says those containing private information were few and much even less since 2011.

4.07pm: Yu tells the court how they used overseas travel records, including to Hong Kong, to trace fraud.

4.09pm: The presiding judge asks Humphrey’s lawyer whether he wants to ask Yu any questions. Asked, Yu describes the workflow of a typical investigation.

4.12pm: Yu reiterates she obtained information from the client, from online sources or third parties.

4.15pm: Yu accepts the charges in as much as she bought information from a third party, but rejects them saying that she did not sell the information, but only used it to provide analysis to clients.

4.16pm: The defence teams end questioning. The judged ask some additional questions.

4.17pm: Asked by a judge, Yu says she did not sign contracts with Zhou, Liu or Cai, because the amount of money involved was too small.

4.19pm: Asked by a judge whether they would have been able to complete their assignments without private information, Yu says: “More is always better than less.”

4.23pm: The court calls Humphrey back to the stand.

4.27pm: The prosecution submits the testimony of three foreign executives and a former employee at Shelian.

4.31pm: The prosecution submits a second set of evidence: testimony by four former Shelian employees and a technician who provided repair services to Shelian.

4.35pm: After a brief interruption debating the merits of the evidence, the prosecution continues with submitting further elements of the second set evidence: testimony by three more former employees. Humphrey interjects, saying two employees only worked with him only very briefly.

4.52pm: The prosecution submits a third set of evidence to the court: testimony by Humphrey, Yu, testimony by Zhou Hongbo, Liu Yu, Cai Zhicheng.

4.57pm: Liu Yu says she was criminally detained in January 2013 for illegally obtaining private information.

4.59pm: Cai Zhicheng says he charged Humphrey 1,500 yuan for every piece of information he provided: identity and residency papers, overseas travel records.

5.01pm: Zhou Hongbo says Humphrey paid thousands and sometimes more than 10,000 yuan for the investigation of a target, which normally lasted between half a month and a full month.

Transcript will be updated during the day.

**UPDATED**

5.41pm: The prosecuion says it can prove with its evidence that Humphrey and Yu bargained with third parties over the price of private information they acquired. It also says that private information of all citizens is covered by criminal law, not merely information handled by public organs and companies.

5.44pm: The prosecution submits the fourth set of evidence: Documents, computers and harddrives seized at their residence in Beijing and their office in Shanghai. One harddrive contained 48,849 documents that relate to the charges, one laptop contained 52,234 documents relating to the charges, the prosecution says.

5.47pm: Humphrey says many of the documents could be duplicates.

**UPDATED**

5.50pm: The prosecution says evidence proves that Humphrey tailed a target in Operation Blackthorn. Humphrey says the task was carried out by a third party.

5.53pm: A defence lawyer for Humphrey reiterates his client’s point. His other lawyer says tailing a target is not necessarily illegal. There are no legal provisions banning the tailing of others to protect one’s own legitimate interests, says the lawyer.

5.55pm: The court rests for a ten minute break.

**UPDATED**

5.59pm: The court releases its next transcript. A defence lawyer for Yu says monitoring is only once mentioned in the deposition and it referred to an employee standing outside an office building for over three hours.

6.01pm: The prosecution says it documented the use of private information in 27 reports in this set of evidence submitted to the court. It adds that it provided relevant information in the pre-trial hearing.

**UPDATED**

6.25pm: The court says on its Weibo post that it will hold a press conference on the trial at 7.30pm. The hearing is still ongoing.

6.37pm: Prosecutors say Shelian company had revenue of 20.96 million yuan between 2005 and 2013. The company earned 830,000 yuan for its work on the Operations Goose, Clown and Blackthorn, prosecutors say.

6.43pm: Prosecutors submit Humphrey’s testimony to police in which he reportedly said that he was aware he was operating in a legal grey zone. He was counting on luck and not considering the consequences, he reportedly told police.

6.46pm: Prosecutors submit Yu’s testimony to police in which Yu reportedly said she obtained hukou information, information on a target’s family members, criminal records and telephone records from Zhou Hongbo. She paid 2,000 yuan for personal information and ordered 20-30 items every year, she said.

6.49pm: Yu worked with Liu Yu until Liu was detained in 2013, according to the police record. Liu provided hukou information, information on a target’s family members, criminal record, overseas travel records, mobile phone records and other information. Liu charged about 800 yuan for an item of information.

6.51pm: Cai Zhicheng provided information of about 20 individuals to Humphrey and Yu, according to Yu’s statement to police. Cai charged between 1,000 and 1,500 yuan.

6.53pm: Yu reportedly told police that they transfered Zhou, Cai and Liu’s commission to their US dollar accounts in Hong Kong.

6.54pm: “Our buying of private information was wrong, but it was not a business operation,” she reportedly told police. “We have a grey zone in this industry, at the time we used extraordinary channels to buy these citizens’ personal information.” Yu reportedly said they relied on luck, did not consider the consequences and regretted their actions.

**UPDATED**

6.59pm: Reacting to the evidence submitted to the court, both Humphrey and Yu say she never told police they relied on luck. Yu said she did not know about the legal environment after the 2009 criminal law reform on privacy.

7.03pm: Humphrey asks the prosecution when police received a first complaint. Prosecuters say the case file started on July 1, 2013.

7.08pm: A defence lawyer submits a third letter attesting to the couple’s good character, two earlier ones’ had already been submitted to the court .

7.09pm: The court concludes the examination of evidence.

7.11pm: The court moves to closing arguments. The prosecution begins.

7.15pm: The prosecution closes by saying that the couple has for nine years bought information on citizens’ identity and residency, family members, vehicle registration, phone records, overseas travel records and had their staff pretend to be employees, investors, clients, or delivery personell to obtain further information. They hired agents to tail and monitor citizens to know more about their living habits and movements.

7.17pm: The prosecution says the couple’s crime was particularly egregious, because they committed it over a period of nine years and because they reaped enormous benefits.

7.19pm: The prosecution closes with a plea for the sanctity of the private space. “Let’s try to consider, if our citizens live in fear in such an environment, how can they feel secure, free or have human rights?”

7.30pm: The court hearing takes a break, to resume later this evening.

More to follow…

**UPDATED**

8.00pm: In his closing defence, Humphrey said the duo did not sell personal information, but rather, sold the analysis and research of such information to clients. He added that the company’s main service is to investigate internal graft, fraud and help cultivate a good business environment. “They have no other ways of achieving this goal.”

8:10pm: In her closing defence, Yu asked the prosecution for proof that 300 reports out of the 700 used personal information. She also disputed the company’s revenue, saying that the prosecution did not calculate for profit after expenses and costs. She shared an anecdote: “Someone saw a thief steal something, but the police said there’s no evidence therefore they can’t arrest the thief, so the person found the evidence and arrested the thief, then the police came back and said the person broke the law. The public security organ said you violated the thief’s rights.”

8:15pm: The court rests for 30 minutes.

**UPDATED**

9:00pm: Both defence lawyers argue that Humphrey and Yu’s actions have inflicted limited harm to society and does not constitute a crime.

9:15pm: The prosecution maintains that the duo violated citizens’ rights. “Before a court ruling, those they investigated have not been deemed corrupt, how can you say the parties you are investigating are corrupt?”

**UPDATED**

10.10pm: In his closing statement, Humphrey talks about his childhood fascination and respect for China. Growing up in a poor family, he saw the China in 1979 and wanted to be a part of its development. He says he has always supported anti-corruption in China, and many of his projects dealt with helping different companies detect internal corruption and fraud. He and his wife wanted to give back to the Chinese community but failed due to their lack of understanding on the 2009 criminal law reform on privacy. Humphrey apologises for disobeying the law and expresses regret. “My wife and I still love and respect China passionately.” He hopes the court will accept their apology.

10.20pm: In her short closing statement, Yu expresses regret over their crimes and begs the court to forgive her husband.

10.30pm: The verdict will be released after the court rests.

**UPDATED**

11.00pm: The court sentences Humphrey to two years and six months in jail on charges of “illegally obtaining private information”, a fine of 25,000 yuan, and deportation from China.

11.05pm: The court sentences Yu to two years and in prison on charges of “illegally obtaining private information”, and a fine of 15,000 yuan.

11.07pm: The couple has five days to appeal this verdict. Court is adjourned.

Is Peter Humphrey The Scapegoat For GSK’s Corruption in China?


http://www.scmp.com/news/hong-kong/article/1556678/ensure-fair-trial-gsk-probe-pair-foreign-correspondents-club-urges

 

On Monday, Humphrey was shown apologising on state-run China Central Television, saying he and his wife “deeply regret” breaking any laws. He added he would not have worked with the drug manufacturer had the company informed him about the full details of the e-mails it received from whistle-blowers.

humphrey1_2653862bscapegoat

Peter Humphrey Feels Cheated By GSK


http://www.bbc.com/news/business-28158410

GSK’s Chinese headache

GSK building

Sir Andrew Witty, the chief executive of GSK, is a man who has said he wants to put ethics at the heart of the pharmaceutical firm’s business.

He has made much of the company’s work in Africa and bringing down that continent’s drugs bill. GSK’s research capability is widely regarded as some of the best in the world.

So, the pain of the allegations coming out of China must be particularly acute.

The contents of the emails sent by the person (or people), known as “gskwhistleblower”, to GSK alleging corruption among Chinese sales teams makes for sobering reading. What is striking is the amount of detail, with email addresses, precise drug names and internal projects all written about by someone who clearly knows the business well.

Whether what they say is right, of course, is another matter.

‘Employee dismissals’

Two emails sent in January and May last year talk of “aggressive sales tactics”, “bribery” and wrongful payments made to thousands of doctors. The emails offer to provide more information.

Following a series of questions sent by the BBC to GSK yesterday, the company responded with its fullest account yet of what it believes has – and hasn’t – happened.

“The issues relating to our China business are very difficult and complicated,” it said.

“GSK takes all whistle-blowing allegations very seriously and actively encourages whistle-blowers to come forward if they have concerns.

“Investigations into the allegations made in January 2013 about GSK’s business in China were conducted over several months with the support of external legal and audit advice.

“Start Quote

GSK has some serious questions to answer about how it treated Mr Humphrey, who is facing trial next month, possibly in secret.”

“Some fraudulent behaviour relating to expense claims was identified, and this resulted in employee dismissals and further changes to our monitoring procedures in China. However, this investigation did not find evidence to substantiate the specific allegations made in the emails.”

The key for Sir Andrew’s reputation is how he handled the allegations once they came to his attention.

Incendiary emails

GSK says it used both in-country and international investigators – freeing them from the allegation that the Chinese arm of the business (accused of systematic corruption) was simply investigating itself.

I understand that a report was completed by May or June 2013 that did find irregularities, but nowhere near the scale alleged in the email.

The fact that Peter Humphrey, the investigator hired by GSK to look at the separate issue of a covert video recording of a senior GSK China executive, Mark Reilly, having sex, found that the allegations were “credible” does not help Sir Andrew.

Mr Humphrey, who is now in detention in China, appears to have had limited access to GSK material beyond that pertinent to the tape – the existence of which was first revealed by The Sunday Times last weekend.

‘Cheated’

Which raises the question – if he was investigating the sex tape which was part of the overall allegations against GSK in China, why wasn’t he given the other incendiary emails earlier in the process?

Mr Humphrey sent a message from prison – seen by the BBC – which says that he feels “cheated”. GSK has some serious questions to answer about how it treated Mr Humphrey, who is facing trial next month, possibly in secret.

It wasn’t until the Chinese authorities announced their own investigation into allegations of corruption within GSK in July that the business made any public comment.

Asked about this lengthy delay, GSK said: “We inform the financial markets in relation to all material matters following internal and external legal advice. We are confident we have satisfied all our disclosure requirements.”

Wider issues

So far, GSK’s share price has hardly flickered since the allegations became public. Investors will be waiting to see the level of any fines the Chinese authorities might impose before voting with their wallets.

And whether anything uncovered reveals wider spread issues about GSK operates. Don’t forget, in 2012 GSK was fined $3bn in America for fraudulently promoting drugs for unapproved use and failing to report safety data to the Food and Drug Administration.

The company insists it has radically changed its processes since then – both in America and China.

And it appears that at present the board is satisfied with how GSK’s executives are handling the investigation.

China is a small part of GSK’s global operations, accounting for about 3% of its revenues.

It is well behind the other big foreign players in the rapidly growing pharmaceutical sector. Astra Zeneca and Pfizer, subject of a takeover battle earlier this year, are the leading foreign drug providers in the country.

But GSK does want to keep hold of its licence. The Chinese three tier market (research and development, manufacturing and consumer) is an increasingly valuable one.

Sir Andrew does not want to pull out. He must hope that the Chinese authorities’ findings come quickly and do not reveal anything which the company failed to uncover.

The Mystery of Peter Humphrey (Plea from his son to GSK CEO Andrew Witty)


http://www.nottingham.ac.uk/cpi/documents/commentary-reports/peter-humphrey-chinas-booming-fraud-industry.pdf

The GSK Chinese Bribery Scandal moved into a new phase yesterday with prime minister David Cameron bizarrely weighing into the discourse with his glowing character appraisal of the good character of GSK. GSK are currently embroiled in a massive bribery scandal in China- one of the biggest corruption scandals to happen in China for years.

Peter Humphrey is a British national who has been detained along with his wife for allegedly aiding GSK in their extensive bribery network.

His son recently made a plea of help to GSK’s CEO Andrew Witty (who is currently on a UK trade mission to China with David Cameron) but according to GSK :

“Peter Humphrey is not a GSK employee and we understand his arrest and investigation is being treated as a separate matter by the Chinese authorities. Therefore we can’t comment further.”

I have to say, it looks like GSK’s China-gate is going to be even more intriguing than their last foray into Constant Gardener territory with their US corruption adventure which cost them to the tune of 3 Billion.

Will be interesting to see how this new GSK saga unfolds…

http://www.telegraph.co.uk/news/worldnews/asia/china/10486659/Son-of-jailed-China-investigator-appeals-to-Cameron-for-help.html

Son of jailed China investigator appeals to Cameron for help

The son of Peter Humphrey, a British investigator who has spent nearly five months behind bars in Shanghai, has called on the Prime Minister to “do everything he can” to help his father during a three-day visit to China this week

Photo: China Central TV

By , Shanghai

10:54AM GMT 01 Dec 2013

The son of a British investigator who has been in Chinese police custody for nearly five months has called on David Cameron to raise his father’s case with China’s top leaders during his three-day tour that starts on Monday.

Peter Humphrey, 57, and Yu Yingzeng, his 60-year-old American wife, were detained by Shanghai police on July 10.

In late August the couple was formally accused of involvement in “operating illegal research companies and trafficking personal information”. They were paraded on Chinese state television wearing orange prison uniforms and Mr Humphrey made what was purportedly a confession.

“We sometimes in the past used illegal means to acquire personal information,” he said, in Chinese. “I’m very remorseful about this and wish to apologise to the Chinese government.”

It is thought that Mr Humphrey, a former journalist who first came to China in the late 1970s, and his Chinese-born wife are currently being held at a detention centre in eastern Shanghai.

Speaking on the eve of Mr Cameron’s trade mission to China, their son, Harvey said: “I hope the prime minister will do everything he can to resolve my parents’ case.”

“I haven’t seen them for five months. The Foreign Office have kept me in touch and I hear they are well treated. But it is very worrying,” the 18-year-old British student told The Sunday Times.

The Prime Minister is scheduled to arrive in Beijing early on Monday morning and is expected to hold separate meetings with Xi Jinping, China’s president, and Li Keqiang, its premier. He is also expected to visit Shanghai where he is likely to meet senior local politicians.

Until disappearing in July, Mr Humphrey ran ChinaWhys, a risk management consultancy that specialised in helping foreign firms safety navigate China’s notoriously complicated and corrupt business environment.

ChinaWhy’s website, which remains active despite Mr Humphrey’s incarceration, says it “offers discreet risk mitigation solutions, consulting and commercial investigation services to corporate clients in important and sensitive matters across the Greater China region and beyond.”

Among its successes, the business lists “neutralizing a counterfeit-and-fraud syndicate that hijacked the business of a global consumer goods manufacturer, eliminating fraud from the buying operation of a leading megastore chain… and orchestrating the recovery of a kidnapped child in China.”

Mr Humphrey’s clients also included GlaxoSmithKline (GSK), the British pharmaceuticals giant that found its China’s operations at the centre of a major corruption probe in July.

GSK’s CEO Sir Andrew Witty, is expected to travel to China with Mr Cameron on Sunday as part of a 120-member trade delegation but it is not clear if either man plans to raise Mr Humphrey’s case with Chinese authorities.

Calls to the British embassy in Beijing went unanswered on Sunday.

The embassy has previously expressed concern that Mr Humphrey had been “publicly interviewed about the details of his case, which is currently under investigation and has yet to come to trial.”

However, observers question Mr Cameron’s willingness to jeapordise economic ties with China by raising thorny issues such as human rights or Mr Humphrey’s controversial arrest.

Couple make public confession over alleged £320m GSK Bribery Scandal


http://www.independent.co.uk/news/world/asia/british-investigator-peter-humphrey-regrets-illegal-data-scam-on-china-tv-8785368.html

British investigator Peter Humphrey ‘regrets’ illegal data scam on China TV

Couple make public confession over alleged £320m bribery scandal a drugs giant

Chinese state television has broadcast a confession by British corporate investigator Peter Humphrey who, along with his American wife, has been held in connection with an alleged £320million bribery scandal at drugs giant GlaxoSmithKline.

“The way we acquired information was sometimes illegal. I feel very regretful about it and want to apologise to the Chinese government,” Mr Humphrey said in the CCTV report.

Such public apologies are common by Chinese officials and celebrities accused of wrongdoing, but a confession by a foreigner rarely happens.

Mr Humphrey sat with his wife Yu Yingzeng – both in orange prison vests and handcuffs – during the report.

The couple were arrested on 16 August in Shanghai and charged with operating illegal research companies and trafficking personal information about Chinese citizens, police said.

Mr Humphrey, 57, and Ms Yingzeng are founders of ChinaWhys, a Shanhai-based risk management firm, which provides investigation services to companies.  GlaxoSmithKline – the biggest UK-listed pharmaceutical firm – was one of their clients.

GSK is accused of working with Chinese travel agencies to host conferences for up to 2,000 people, with events costing about 10million yuan (about £1m).

Chinese authorities claim GSK executives inflated the cost of these events to use excess cash to pay bribes to doctors and middlemen.

The company has admitted some of its China executives may have violated both Chinese law and the company’s  policy. A GSK spokesman confirmed they were co-operating with the authorities.

CCTV’s television broadcast also showed Mr Humphrey’s and Ms Yingzeng’s offices being raided, as well as interviews with police officers.

“[The] Investigation found that the couple illegally trafficked a huge amount of personal information on Chinese citizens to seek profits via registering so-called research companies in Hong Kong and Shanghai since 2003,” the Xinhua news agency reported.

Mr Humphrey was formerly a Reuters correspondent in Hong Kong. After leaving the news agency 14 years ago he worked as an investigator in different parts of Asia, tracking white collar crime and corporate fraud.

Ms Yingzeng is a California-educated accountant who has served as a financial controller in the United States and Hong Kong, and as a high-level advisory consultant in China.

ChinaWhys’ website claims Ms Yingzeng: “Is experienced in operational/financial audit to identify management control weakness, bribery concerns and fraud risks.”

It says she has worked on “complex fraud investigations at multinational operations in China, [with] successes including solving a supply chain fraud by establishing activity links to capture criminal evidence for a US food manufacturer”.

The British Embassy in Beijing confirmed last week that Mr Humphrey had been arrested and they were providing consular assistance, but gave no details of charges.

GlaxoSmithKline China scandal: British man arrested


http://www.theguardian.com/business/2013/aug/21/glaxos-smithkline-china-british-couple-arrested

A Chinese employee walks into a GlaxoSmithKline (GSK) office in Beijing
A Chinese employee walks into a GlaxoSmithKline office in Beijing. Peter Humphrey and Yu Yingzeng were detained as police investigated bribery allegations involving the company. Photograph: Jason Lee/Reuters

A British risk consultant held in China since mid-July amid an investigation into the country’s pharmaceutical industry has been arrested, the British embassy in Beijing and his family said on Wednesday.

Peter Humphrey and his wife, Yu Yingzeng, were detained in Shanghai on 10 July as police investigated bribery allegations against GlaxoSmithKline.

In China, an arrest typically means police believe they have enough evidence for a case to be brought to trial. Detentions can last for weeks and end in release without charges being filed.

It was not immediately clear if Humphrey’s arrest was directly related to the investigation of GSK, which has been accused by China of funnelling up to 3bn yuan (£312m) to travel agencies to facilitate bribes to doctors and officials.

China has taken a tough stance on corruption and high prices in the pharmaceutical industry as it widens access to healthcare, bringing an estimated $1tn healthcare bill by 2020.

“We can confirm the arrest of a British national, Peter Humphrey, in Shanghai on Monday19 August. We are currently providing consular assistance,” a British embassy spokeswoman, Hannah Oussedik, told Reuters by phone.

Oussedik declined to offer additional information about the reasons for Humphrey’s arrest. The US embassy in Beijing could not be reached immediately to confirm whether Yu had also been arrested. The US consulate in Shanghai declined to comment.

Shanghai police did not respond to a request for comment.

A statement issued by a member of Humphrey’s family said both Humphrey and Yu had been arrested.

A source close to the family said they had not yet been told which charges would be laid against Humphrey, or when, but the statement said lawyers had told the family that the couple were detained last month because they had broken a law related to buying private information.

Humphrey and Yu co-founded ChinaWhys, a business risk advisory firm that has done work with drug companies, including GSK, separate sources familiar with the matter have said.

Humphrey worked as a journalist for Reuters in the 1980s and 90s. The ChinaWhys website says he has been a risk management specialist and corporate detective for 14 years.

In March 2010, four executives from mining giant Rio Tinto were jailed for taking bribes and stealing commercial secrets. Three of those executives were Chinese while the fourth was a Chinese-born Australian.