Another Little “Slap On The Wrist” For Naughty Glaxo…


“…The SEC said the company failed to institute and maintain an adequate system of accounting controls and that it lacked an effective anti-corruption compliance program.

The improper payments in China weren’t accurately recorded on GSK’s books, the regulators said”…


“…In a statement, the company said it had cooperated with the SEC and it had received credit for taking steps to improve its operations, such as changing how sales representatives are paid and stopping the practice of paying healthcare professionals to speak to doctors about the company’s products.

It also said the U.S. Justice Department, which had opened a parallel criminal investigation into the matter, was closing its probe without any action against the company.”….

GlaxoSmithKline to Pay $20 Million to Settle SEC Bribery Probe

SEC claimed drugmaker’s Chinese subsidiaries engaged in bribery schemes to increase sales

GlaxoSmithKline PLC agreed to pay $20 million to settle charges that the drugmaker’s Chinese subsidiaries engaged in bribery schemes to increase sales in the Asian country, the Securities and Exchange Commission said Friday.

The SEC alleged that between 2010 and 2013, GlaxoSmithKline’s subsidiary and a China-based joint-venture violated the Foreign Corrupt Practices Act by providing inappropriate gifts to foreign officials, including health-care professionals. The commission also alleged that the payments were often falsely recorded as legitimate expenses.

The bribes took the forms of gifts, improper travel and entertainment with no or little educational purpose, shopping trips and cash, among others, the SEC said in its order.

Glaxo entered into the SEC agreement without confirming or denying the charges, the U.S. agency said in its statement.

In a separate statement, Glaxo said it has installed several reforms, including shifts to the compensation of sales representatives and the end of payments to health-care practitioners for advocating for Glaxo products to other prescribers.

“The U.S. Department of Justice has also concluded its investigation into these matters and will be taking no further action,” Glaxo said in a prepared statement. “The SEC and DOJ investigations were initiated as part of an industry-wide inquiry in 2010.”

A Justice Department spokesman declined to comment.

In 2014, a Chinese court found the company guilty of bribery and penalized Glaxo $491.5 million in the same matter, which was touted at the time by Chinese state media as the largest-ever corporate fine in China.

Five of the company’s managers, including Mark Reilly, its former top China executive, were also convicted of bribery-related charges and received suspended prison sentences.

Write to Ezequiel Minaya at


GSK In China II (Thomas Fox) : The Denoument

Following on from his brilliant essay on GSK’s China-Bribe Scandal (see here), Thomas Fox has written a part II on the debacle. This 2nd e-book is some 17,000 words long (too long for a blog post) and if you want to read it in full you can access it on this link, however here are some choice quotes-

GSK 2,-41,61

 “Author’s Note

Last summer brought the anti-corruption compliance world a new situation as the Chinese government aggressively investigated, for the first time a western company for bribery and corruption of Chinese citizens in China. Last year I published an eBook on the investigation phase of GlaxoSmithKline PLC (GSK) corruption matter in China. This year, as the Chinese government moved into the prosecution phase, I have updated the GSK matter through its conviction for bribery and corruption by a Chinese court. I have also tied to collect some of the most significant lessons to be learned for any compliance practitioner from the facts and events surrounding this case and what it may mean going forward for the compliance practitioner. Once again, thanks to Maurice Gilbert at Consileum for the idea to update my book, and my heart of gold wife, Michele, for editing it..”

  • “..Where were the US Department of Justice (DOJ) or Securities and Exchange Commission (SEC) be on these issues as the might relate to violations of the US Foreign Corrupt Practices Act (FCPA)? Consider the following about GSK; in July of 2012 GSK pled guilty and paid $3 billion to resolve fraud allegations and failure to report safety data in what the DOJ called the “largest health care fraud settlement in U.S. history” according to its press release. The DOJ press release went on to state “GSK agreed to plead guilty and to pay $3 billion to resolve its criminal and civil liability arising from the company’s unlawful promotion of certain prescription drugs, its failure to report certain safety data, and its civil liability for alleged false price reporting practices.” The press release noted that the resolution was the largest health care fraud settlement in US history and the largest payment ever by a drug company for legal violations…”
  • “..You would think that any company that has paid $3 billion in fines and penalties for fraudulent actions would take all steps possible not to engage in bribery and corruption. Indeed as part of the settlement GSK agreed to a Corporate Integrity Agreement (CIA)…”
  • “…This CIA not only applied to the specific pharmaceutical regulations that GSK violated but all of the GSK compliance obligations, including the FCPA in addition to requiring a full and complete compliance program, the CIA specified that the company would have a Compliance Committee, inclusive of the Compliance Officer and other members of senior management necessary to meet the requirements of this CIA, whose job was to oversee full implementation of the CIA and all compliance functions at the company…”
  • “..These additional functions required Deputy Compliance Officers for each commercial business unit, Integrity Champions within each business unit and management accountability and certifications from each business unit.Training of GSK employees was specified…”
  • “…Further, there was detail down to specifically state that all compliance obligations applied to “contractors, subcontractors, agents and other persons (including, but not limited to, third party vendors)”. So while GSK may have separate FCPA liability to be investigated by the DOJ; it may be more of an issue that the company could be in violation of its CIA. GSK has of course averred that it is fully cooperating with all of the various investigations into its alleged bribery and corruption. Further, as reported in Ward’s FT article, “GSK said it was “committed to operating its business to the highest ethical standards”. The company had “previously denied any systemic problem with corruption and said the latest Chinese allegations were “deeply concerning to us and contrary to the values of GSK”..”



Forbes: GlaxoSmithKline’s Move To Drop Use Of Medical Experts Is Misguided

GlaxoSmithKline’s Move To Drop Use Of Medical Experts Is Misguided

I cover news on drugs and R&D in the pharma industry

The reputation of GlaxoSmithKline has suffered a number of hits in the past few years. In 2012, it paid $3 billion to the Department of Justice to settle charges that GSK paid doctors to prescribe drugs for unapproved uses. In 2014, GSK had to pay a fine of $488 million in China for bribing doctors to prescribe its drugs.

As reported by Andrew Ward of the Financial Times, GSK is trying to clean up its image by stopping the practice of paying doctors to promote its products. On the surface, this sounds like a noble thing to do. After all, there are those that believe that “good drugs should sell themselves” and promotional efforts are only needed for unimpressive new medicines. Actually, that’s not the case.

When a new product is launched, a company seeks to make its availability known. It will also seek to have experts in the field talk about the new drug to doctors who are most likely to prescribe it. These discussions focus on the value of the drug, the benefits it brings compared to existing therapies, how the drug should be best prescribed and, yes, even the side effects. Any company, large or small, will strive to find experts who are well known and are well respected among their peers to discuss its drug. If a company is fortunate to recruit such an expert, it will pay all of that expert’s expenses as well as an honorarium for her time and efforts.

Ah, there’s the rub–money! Because these experts get paid, there is an unfortunate perception on the part of some that these experts are really “hired guns” who are acting as shills for the evil drug company. GSK is trying to change this perception by no longer using such paid experts. Instead, GSK plans to hire people to perform this function so that it will be transparent to all that these are GSK employees touting its medicines.

By doing this, GSK feels it is taking the high road. In fact, a GSK executive claimed that the use of paid external experts will one day be viewed as the same as smoking on airplanes. “People will look back and say ,‘Did we really used to do that?’”

If true, that would be a shame. Using experts to tout a new drug benefits not just the company but patients and physicians. An expert puts his name and reputation on the line when discussing his or her experience with a new medicine. Such testimony can be very powerful. That’s why companies do this. An expert provides an imprimatur of the meaningfulness of the clinical data that supports the drug’s benefits. This can provide assurance to prescribers and, ultimately, patients that experts in the field believe this new medicine has value.

Recommended by Forbes

But, of course, these experts are being PAID. How can they be trusted? Well, can we really expect experts to do this on a pro bono basis? I doubt that any of us would agree to take time to do this sort of work for free. Furthermore, all of these payments are now publicly disclosed. As a result of the Affordable Care Act (“Obamacare”), every payment in excess of $10 made to a physician by a drug company is now publicly reported. Thus, people have complete transparency as to the amount experts are being paid for their work.

One has to question what real value GSK’s new policy will create. If a newly hired GSK physician presents to a group of doctors about a new GSK drug, will he or she have more credibility than an outside expert? The GSK physician will undoubtedly have goals on the effectiveness of his or her work–essentially, greater drug sales. Yet, it is difficult to believe a GSK employee will generate more credibility than an external expert who has little stake in the ultimate commercial success of the new drug. If I were a physician or a patient, I would be more comforted knowing some of the leading lights in the field have used and endorsed the new drug as opposed to a GSK employee.

The biopharmaceutical industry certainly needs to improve its reputation. GSK, in particular, faces challenges and I am sure it believes that it is doing the right thing with this shift in policy. However, I think this move is a disservice to the those who are diligent about learning the pros and cons of new drugs. Hopefully, the rest of the biopharmaceutical industry will not follow GSK’s lead on this topic.

Bob Fiddaman Nails Andrew Witty’s Cavalier Attitude About GSK’s Unethical Behavior

“There have been warnings about paroxetine for a long time,” including a 2007 Food and Drug Administration advisory on the risk of increased suicidality when anti-depressants like paroxetine or imipramine are used to treat people age 18 to 24, according to Dr Jon Jureidini of the University of Adelaide in Australia. The authors of the 2001 study did not report this side effect, although the evidence was there, said Dr Jureidini, a co-author of the re-analysis.

“A broad community of people around the world have raised concerns,” he told Reuters news agency.

“Mistakes were made”…. thousands of kids killed themselves because of Seroxat…

All in a day’s work for  GSK’s CEO Andrew Witty..

Minor inconveniences on the road to hoarding his millions it seems…

What’s a few thousand dead kids?

As long as there’s no dent in profits.. that’s the bottom line isn’t it Witty?

Wednesday, October 28, 2015

Andrew Witty: The Art of Deflection.

Sir Witty should have been a politician. Very adept at answering a question…with a question.

Here’s a recent interview with Evan Davis, Presenter, Newsnight, BBC

Skip to 29.40. Transcript for this section is below video.

Transcript. 29.40

Evan Davis
I’m going to open it to the floor in a second, because we do want to leave half the session for the audience to ask questions. I’ll just finish with kind of a general reflection, because it is interesting, and it’s nice when you talk about the drugs and what they cure, what the treatments are. Don’t you find it very interesting that the pharmaceutical industry has a bad reputation? We read about the China corruption, we read about profits, we read about profiteering. It is an industry that saves lives, no one can dispute that. It’s an industry that produces pills that are completely transforming for people’s welfare. Yet, it’s actually not a terribly popular industry. I just wonder if you can explain that paradox. Is it that you’ve done bad things and that’s been recognized, or is there somehow something the public don’t understand about the industry that makes them feel negative about it? Or am I wrong in thinking there’s a slight [indiscernible] around it?

Andrew Witty
No, clearly – first of all, I think we are, slightly alongside any big industry, or any big institution, there is a bit of that. We are big companies, we’re global. Again, like any big organization, you’re vulnerable to your weakest link in the organization. So if something goes wrong, particularly in today’s social media world – I often think about what it must have been like to run a global company in the 1970s, where you had to wait for the ship to arrive to find out what happened on the other side of the world. Today, the Wall Street Journal calls you before you’ve even heard about something inside your own company. So I do think there is a certain phenomena where – and you see that across many, you look at it in politics, you look at it in newspapers. The hacking stories, all things like that. So I think it’s a bit of that. I do think – let’s be honest, nobody wakes up in the morning hoping that they’re going to need a drug from GSK. You don’t wake up in the morning thinking, actually, if it’s a really good day, I might be diagnosed to be ill and I might need a drug. So we’re not aspirational in that sense. So you start by saying, actually, I’ve got some bad news, because I’ve been told I’m not very well. They then said: we might have some good news, because there’s something we can help you with. Then in some countries, I have to pay for it. Or in Britain, you might go to the doctor and they say: actually, I’d like to give you this, but NICE have said I can’t. So then there’s a whole series of reasonably negative concepts around pricing. So there’s a bit of that. Then you’ve got – actually, we do occasionally make mistakes. Things go wrong. We have inevitably – of course, we go through all the processes with the regulators to get a drug to be as safe and effective as it can possibly be. But the reality is, every time a human takes a drug, it’s like a clinical trial. You don’t really know what’s going to happen. Everybody can react a different way. So on the one hand, what is the story of the drug industry? The story of the drug industry is wonder drugs. On the other hand, it’s danger drugs. Those are the two extremes that we have. It’s kind of unavoidable.

Evan Davis
But you’re saying there are bad apples, and it goes wrong. Is that right, or is it – for example, in the China case. Was it that there was a bad apple and it went wrong, or was it that that was normal behaviour in certain markets, and it just got called out in that particular case?

Andrew Witty
For obvious reasons, I’m not going to get into all the details of that.

Evan Davis
Was that behaviour actually something, or was it just a slight extension of behaviour that is normal?

Andrew Witty
I think the bigger question is, where do you want to go forward?

Evan Davis
No, but just answer that one.

Andrew Witty
There’s no doubt, if you ask the more general question – so there have been concerns over the years of, is the drug industry transparent enough? What’s the relationship of the drug industry with doctors? All of those are kind of concerns – let’s call them concerns or reasons for anxiety, whatever they are. Sometimes they’ve spiked up into real issues. What we’ve really tried to do, and we’re beginning to see some other companies, I think, following a similar direction, is we’ve said: you know what? We get that. We get that transparency is a cause of concern. People are worried that something is being hidden. We didn’t think there was but people – perception is everything, right? So what did we do? We came out and said: we will publish every single bit of clinical data we have in the company. We are the only company to do that at this point. Every single thing. If a researcher wants to know exactly what the data was on patient number – all anonymized, but on Patient 1002, in Clinical Trial 87, from 2002, we will give them that information. All the way through, we’ll do that. We’ve said we will stop all payments to physicians to speak on behalf of the company. It’s a perfectly legal practice, everything the company has done – but we stopped it all.

Evan Davis
But this is a recognition – there is a lot you’ve done to present these things differently. But it is a recognition that it was pretty dysfunctional before, isn’t it? Because publishing data, to me, honestly, doesn’t seem like a great achievement. It just seems to me that that’s what you should be doing with data. Not bribing doctors seems like a thing you would do.

Andrew Witty
I wouldn’t say it’s bribing doctors – it’s perfectly legal to pay. If you went to a physician and said, would you expect to be paid for speaking on behalf of somebody, they will probably say yes. Actually, in most countries in the world, it’s perfectly legal. However, there are risks it can be abused. People can make mistakes. And there are risks that there is a misperception. Just to your point on publication, do you think academics are mandated to publish their data? Do you think universities publish all their failed studies? They don’t, but we do.

One box of chocolates for the first person to tell me how many times Witty deflects the questions put to him.


GSK were forced to be transparent, they didn’t just decide one day that they were going to be the first pharmaceutical company to “open it’s doors” (Halfway)

This from the Department of Justice/GSK agreement

“Among other things, the CIA also requires GSK to implement and maintain transparency in its research practices and publication policies and to follow specified policies in its contracts with various health care payors.”


“Moving forward, GSK will be subject to stringent requirements under its corporate integrity agreement with HHS-OIG; this agreement is designed to increase accountability and transparency and prevent future fraud and abuse.”

I think the bigger question is why did Witty fail to mention that his company were forced to be more transparent.

I’ll leave the last words to Witty…

“It’s a perfectly legal practice, everything the company has done…”

Bob Fiddaman.

Original video here.

Peter Humphrey Interview In German Magazine

A good translation of a recent interview and article about Peter Humphrey.

Peter became embroiled in GSK’s China bribery scandal when he was hired by GSK to investigate a GSK employee.

In my opinion, Peter, and his wife, were wrongly jailed and I think the Chinese needed to jail someone. I think that they were scapegoated.

It’s quite obvious to me, why Mark Reilly (head of UK China Bribe operations) was not jailed, and why he merely deported back to the UK with a suspended sentence.

Money talks.. and bullshit walks…

Wirtschaftswoche article 2015-09-11 German

(original German article above, and English translation below)

Peter Humphrey

“The man who researched too well”

China: for years, during his work for international companies, Peter Humphrey uncovered corruption

and embezzlement. Then he found the wrong people in his sights ‐ and changed from the hunter to

the hunted.

In early 2013 Mark Reilly, China head of the British pharmaceuticals co. GSK, received a few

unpleasant e‐mails. The senders threatened him with releasing documents about the company’s

bribery practices. The senders also stated that they had a video of private misdemeanours. Many

people suspect that a former Glaxo female employee was behind the e‐mails – up to Dec 2012 she

was responsible for “government relations”. With the threat of releasing the documents, she is said

to have demanded a large sum of money from Reilly. Reilly sees himself as the victim of a smear

campaign. He turns to detective and investigator Peter Humphrey. Humphrey and his wife, via their

firm ChinaWhys, have specialised for years in uncovering corruption and embezzlement in China.

They count well‐known international firms, including many Germans, amongst their customers.  He is

commissioned to find damaging material about the (female) blackmailer.

From this point on, the story could have taken an expected course: Humphrey would have been on

the blackmailer’s trail, would have taken the manager out of the firing line, and collected his fee. The

blackmailer would have been charged; perhaps all those involved would have agreed to stay silent.

Instead, though, Humphrey himself was arrested a short time later, charged, and locked up for two

years in a Shanghai prison. He was only released on 17 June this year – here he tells his story.

Mr Humphrey, you’ve just been let out of prison and are living in a house in southern England. Why

on earth were you locked up by the Chinese authorities?

At the moment I can’t mention the names of any persons or companies. But: A large European

company commissioned us to investigate a smear campaign. The China boss of the company was

blackmailed. Someone demanded a lot of money, otherwise he would expose the company’s corrupt

practices. The company’s board wished to know who lay behind the blackmail.

What happened then?

We were able to find out that the blackmailer himself/herself had a skeleton in the cupboard. We

wrote a report and gave it to the company’s China boss.

Although the case has already been made public, Humphrey doesn’t mention the name

GlaxoSmithKline (GSK) at all, possibly so as not to endanger a later out‐of‐court settlement with the


In summer 2013, shortly after he and his wife had handed over their report, Chinese authorities

searched the premises of ChinaWhys. Over the years the company had encouraged Chinese doctors

and hospitals to prescribe GSK drugs by giving them cash and gifts. The amounts involved came to

hundreds of millions. In Sept 2014 was sentenced to a fine of 3,000 mill. RMB, around 430 mill. EUR.

China boss Mark Reilly was sentenced to three years on probation. But instead of then closing the

case and taking the investigator to one side to thank him, Shanghai’s authorities brought a charge

against Humphrey’s firm ChinaWhys. The charge: illegal trading of data.

Mr Humphrey, are the charges accurate?

Now and again we commissioned agencies to find certain data for us. This was so we could help

convict people suspected of embezzlement or corruption. We couldn’t control how these agencies

obtained the data. However, there were other reasons to arrest us.

Such as?

The blackmailer had very good contacts within the Shanghai police and judiciary. Had our report been

publicised, the blackmail threat would have been lost. Therefore the contacts were used. The

authorities examined the company and a huge bribery scandal came to light. The company

announced that it was prepared to pay an enormous fine.

Humphrey’s supposed offence sounds absurd: the law that the authorities are keen to use forbids

the trading of addresses to send spam e‐mails.

“The woman, who wanted to blackmail Reilly, was the daughter of a powerful politician. That

probably started the whole thing rolling,” said Stuart Lindley, who works as a tax adviser in Peking.

President Xi Jinping has announced over and over again that he wishes to promote the rule of law.

Since then, the number of proceedings against corruption has increased sharply. In some regions the

whole Party leadership has had to go, and many companies have paid large fines. But corrupt

networks that are still intact are defending themselves with equally harsh methods. Above all the

business metropolis Shanghai has gained the reputation that, there, personal relationships stand

above the law.

How far above the law, became clear to Humphrey and his wife on 10 July 2013 at the latest, when

the security forces were searching their premises.

What happened after?

We were interrogated until 2.00am in the cellar of the infamous police HQ 803. Afterwards they took

us to a clinic in Pudong district. At 4.00am we were split up. I couldn’t speak to my wife again for

almost another two years.

What about the conditions in the prison?

I was put in a 5m x 3m cell. Two walls were made of wooden fence poles. Therefore the room was

completely see‐through. In the corner were a washbasin, and a hole that served as the toilet. 12

people slept in the cell on pink‐coloured mats. It was very hot. I was the only foreigner. The light was

on – it was never switched off in these 14 months.

How did the next few days go?

They mainly concerned interrogation. They took place every day for about two hours. I was put in a

room, in which there was a steel cage. I was fastened to a chair with handcuffs and interrogated. A

TV was on the whole day – mostly showing anti‐Japanese propaganda.

Were you beaten?

No, but my health deteriorated. I had back trouble and prostate problems, which I still have today.

Humphrey had a good reputation in China. Above all, he was very well connected in western business

circles. A German lawyer says: “I believe they looked for a reason to arrest him.” The opportunity

arose when he started to work for GSK. “He has always helped companies to uncover fraud cases.

Here he was supposed to help a company that itself was doing the bribing in a big way, “ says his ex‐

partner Lindley. So, with his investigation, Humphrey was caught in the crossfire: what he had

discovered could not please either the local Party or his client.

Mr Humphrey, how did you pass the time?

As from Jan 2014 my wife and I were allowed to write each other letters. They were read and checked

by at least three censors, and sometimes it took a month for them to be delivered, although we were

only 20 metres apart. But these letters were a great source of moral support for me. Without them, I

don’t know if I could have got through this period. Apart from that, I read about 140 books.

Which ones?

Everything possible, classics: “War & Peace” by Tolstoy, “Crime & Punishment” by Dostoyevsky, seven

volumes of Marcel Proust’s “In Search of Lost Time”, all of Haruki Murakami’s books. A Rotary friend

of mine organised the books for me. He wanted to give me the last one, when I had my freedom back.

I’m afraid, though, that I have no more time for reading. Apart from the books mentioned,

biographies by other people who had been imprisoned were very important for me: by Ingrid

Betancourt, who was taken hostage by Columbian rebels, and by Nelson Mandela. These books

showed me the strength of the human spirit, and they became a sort of moral standard for me.

What happened on the last day of your imprisonment?

It wasn’t really like that. It was more of a process. At the end of April, they told me that I had a

tumour. From then on, the pressure on the prison governors kept increasing. Finally I was put into a

special wing and on 9 June in a Shanghai hotel I saw my wife again.

We were there for eight days under house arrest. Then we left the country. They demanded, though,

that I should sign a statement, whereby I agreed not to talk either with the media, lawyers or with

politicians about my case. They urged us three times not to report to the authorities in Peking what

had happened to us.

Did you sign?

No. But my wife did. I went to them and told them that this was a forced signature and therefore not

binding. I want justice.

Humphrey and his wife left the country straight after. In summer 2014, GSK asked the Chinese

people for forgiveness, but about Humphrey they only said: “GSK commissioned ChinaWhys to find

out what lay behind the violation of the private life of company’s China boss. ChinaWhys was not

commissioned to investigate the accusations of the whistle‐blower.”

Do you want to sue the company?

That’s one of several options. But legal methods are not the only way. I wish to appeal to the social

conscience of this company. We want compensation.

You lived in China for over 20 years and studied Sinology. You know the country. What has changed

in China?

Above all, the climate in Shanghai is something different. The city is the most corrupt in the whole of

China. Relationships are similar to those in the 1920’s: the police act in the interests of the rich and

powerful, judges work for clients. We knew before our imprisonment that something had changed.

But we were surprised at how much the situation there has got out of control. The central

government in Peking hardly has control any more over this city.

Will your case have long‐term consequences?

This case has shown that careful investigations of company practices and of fraud cases are not

wanted. But they are essential for a functioning market economy. Police and judiciary do not operate

independently, but under instruction from the rich and powerful. Nobody is safe in Shanghai – no

person, no company.

“Peter, as a first offender i.e. without previous convictions, and as someone who has done a great

deal for the certainty of the law in China, received a heavy punishment – that has unsettled many in

the international business community”, said the German lawyer, himself so unsettled that he didn’t

want to reveal his name. It’s still not clear to this day, whose interests Humphrey’s imprisonment

actually served. The suspected (female) blackmailer, at least, has been working again for GSK since

August this year. Business goes on.

Remembering Peter Humphrey And His Wife Yu Yinzeng From The GSK-China Scandal…

Harvey Humphrey accused the multinational of “misleading” his parents and claimed the company had “gone into full survival mode”, which he said included denying any connection with his parents.

He told Sky News: “This whole thing stems from GSK’s misleading of my parents and I think in that process they trod on several powerful toes, if I may put it that way.”

Last year, GSK were found guilty in China of creating a massive bribery network, they were fined a couple of hundred million, and it seems that the scandal more or less disappeared from the mainstream media. Two questions I would like to ask about this case are (1) Were Peter Humphrey and his wife the scapegoats for the whole scandal? and (2) When Mark Reilly (described as the ‘criminal godfather’ of the bribery network) was deported with a suspended sentence, did he continue working for GSK?

Personally, I think that GSK hung Harvey, and his wife Yu Yinzeng, out to dry. Someone needed to go down,  China needed people to jail for this, but it was never going to be Mark Reilly was it? Some people are too big to fall…

If anyone has any information on this contact me on

Furthermore, Harvey- if you’re reading this- contact me if you wish..

The trial of Peter Humphrey, a British corporate investigator, and his wife Yu Yingzeng will both open and close on Friday at Shanghai’s Intermediate People’s Court.
But whatever verdict the court hands down, it will bring a year in limbo to an end for Harvey Humphrey, their 19-year-old son.
His parents were arrested last July, the collateral damage of a police investigation into GlaxoSmithKline (GSK), the pharmaceutical giant.
They have spent the last year in a detention centre in Shanghai, charged with “illegally collecting information” on GSK’s behalf.
Harvey was left alone to fend for himself, dropping out of university after only two weeks and living in an apartment in Redhill, Surrey, living off an emergency bank account that his parents set up three years ago and going on long bike rides to take his mind off the worry.

But, he said, it is not the Chinese system which is to blame for what happened. “I do not feel different at all about China. I would not blame this on China. The cause is not the Chinese, it is GSK,” he said, in an interview on the eve of the trial.

Harvey with his parents Peter Humphrey and Yu Yingzeng, who will face trial in a Shanghai court on Friday For years, he had been aware that his parents, seasoned corporate investigators, had been operating in a grey area to collect their research. “I always knew this (their arrest) was possible,” he said. “I know ChinaWhys (their business) did work that other investigation companies would not do. They were very detailed in their work.” GSK hired Mr Humphrey and his wife in March 2013 for “Project Scorpion”, an investigation into 49-year-old Vivian Shi, a former employee that it suspected of a smear campaign against its China boss, Mark Reilly. Ms Shi, whose father was a high-ranking government official at Shanghai’s Health bureau, had been fired the previous December for allegedly falsifying her travel expenses. But GSK suspected she was also to blame for 23 anonymous emails to various Chinese government offices alleging that bribery was rife in the company and endorsed by the senior management. GSK turned to Mr Humphrey and his wife after one particular email, to the company’s main board in London, featured a professionally edited sex tape of Mr Reilly and his Chinese girlfriend, Wu Wan, a secretary at CCT, a travel agency used by GSK. Mr Reilly suspected that someone had slipped into his apartment, in a guarded compound in central Shanghai, and installed the secret camera while he was on a business trip. By the time the sex tape had been emailed to London, the camera was gone. But GSK allegedly denied to Mr Humphrey and his wife that any of the allegations of bribery in the whistleblower’s emails were true. “They said the allegations were untrue,” said Harvey. “Then two weeks later they said actually these things did happen. My father would have changed the conditions of the investigation if he had known. He would have investigated the allegations instead of this one person. I do not think as an investigator you would have taken the risk of investigating a whistleblower before you investigated the allegations.” GSK has insisted that an initial investigation into the claims “did not find evidence to substantiate the specific allegations made in the whistleblower emails”. “When I saw my dad last Friday, I mentioned GSK once. I mentioned Reilly to him once. He expressed a very low opinion of Reilly.” Mr Humphrey and his wife began piecing together Ms Shi’s network, speaking to her former colleagues, and using their contacts to find out about her government and police connections. In their agreement with GSK, they showed they were aware of the potential risk and stated that they intended to stay within the bounds of Chinese law. “Please note that this is a period of serious political tension, with a tightening of control over information flow,” they wrote. “We have seen sudden regulatory restrictions on the availability of certain documentary data in recent months. We would make our best efforts to complete the assignment by gathering all available information through legal means”. But shortly after their initial report was finished in June and handed to GSK, the couple were arrested. At the time, Harvey was in Hong Kong, doing a summer job after finishing school. “On July 10, I realised they were not answering their phones. They have two phones each and three were off and one of my dad’s was ringing out,” he said. “It was a Friday and then I had a tense weekend. I changed locations. I did not want the Chinese to know where I was. I phoned our ayi (housekeeper) in Beijing and she was very panicky. She said the police were looking for me too and she was extremely scared.” Within a few days, consular officials had located Harvey’s parents in detention. Despite some concerns that he might also be the target of the police, Harvey said he remained calm. “I did not know how long it would take. I thought they would be out in two months. So I was not that worried. I just had to wait.” A year later, he is now hoping for leniency in court. “I think they are going for a humane approach, a change of tack, which is a very good sign. I think for the Chinese they see it is in the interests of both sides that my parents are let go.” GlaxoSmithKline ex-boss to be deported back to UK from China Mark Reilly given three-year suspended prison sentence after pleading guilty to bribery during one-day trial in Hunan Province GlaxoSmithKline logo on Shanghai office building GlaxoSmithKline logo on Shanghai office building. Former China boss Mark Reilly pleaded guilty to bribery following a one-day trial. Photograph: Aly Song/REUTERS Rupert Neate and Nick Fletcher Friday 19 September 2014 13.49 BST Last modified on Friday 19 September 2014 13.51 BST Shares 570 The British former boss of GlaxoSmithKline in China will be deported back to the UK after pleading guilty to bribery-related charges and being handed a three-year suspended prison sentence. Mark Reilly had been barred from leaving China for the past year and accused of overseeing a “criminal godfather” scheme to bribe doctors with £300m worth of cash and sex to prescribe GSK drugs. On Friday Reilly was given a three-year jail term suspended for four years, following a one-day trial behind closed doors in Changsha, in southern China’s Hunan Province. But it is unclear whether Reilly, who remains a GSK employee, will have to serve out the four-year period in China before he is sent back to Britain. GSK said it was urgently trying to clarify the sentence and ensure his immediate return to the UK. A Chinese government source was quoted as saying Reilly “will be deported so he won’t be in detention in China”. Four other senior Chinese GSK executives were also handed suspended sentences of between two and four years. The company was fined £300m after the court found that Britain’s biggest drugs company had “offered money or property to non-government personnel in order to obtain improper commercial gains”. After the verdict GSK issued an “apology to the people of China” and said it had “reflected deeply and learned from its mistakes”. “GSK sincerely apologises to the Chinese patients, doctors and hospitals, and to the Chinese Government and the Chinese people. GSK deeply regrets the damage caused. GSK also apologises for the harm caused to individuals who were illegally investigated by GSK China Investment company,” it said. Advertisement Andrew Witty, GSK’s chief executive, said: “Reaching a conclusion in the investigation of our Chinese business is important, but this has been a deeply disappointing matter for GSK. We have and will continue to learn from this. GSK has been in China for close to a hundred years and we remain fully committed to the country and its people. “We will continue to expand access to innovative medicines and vaccines to improve their health and well-being. We will also continue to invest directly in the country to support the government’s health care reform agenda and long-term plans for economic growth.” Witty took a £245,000 cut to his bonus for last year specifically related to the corruption scandal, but that was in the context of a total pay and shares package of £6.5m, of which the bonus made up £1.9m. GSK could face further fines from the UK’s serious fraud office and US department of justice, which are both investigating bribery allegations that also stretch to Poland, Iraq, Jordan and Lebanon. The company said it had fundamentally changed the incentive programme for its sales force, and increased the monitoring of invoicing and payments. When the Chinese authorities began their investigation into the claims last year Gao Feng, the head of China’s fraud unit, said: “We found that bribery is a core part of the activities of the company. To boost their share prices and sales, the company performed illegal actions.” GSK was alleged to have used a network of more than 700 middlemen and travel agencies to bribe doctors and lawyers with cash and even sexual favours. “There is always a big boss in criminal organisations, and in this case GSK is the big boss. In order to win the favour of GSK, some travel agencies don’t just offer money to their executives but also sexual bribes,” Gao said. The scandal erupted into the public domain after a covertly filmed sex video of Reilly with his Chinese girlfriend was emailed to Witty and other GSK board members in an apparent blackmail attempt. Accompanying the footage were detailed allegations of sales and marketing practices described as “pervasive corruption” by someone calling themselves “GSK whistleblower”. When the sex video surfaced, GSK hired a British corporate investigator, Peter Humphrey, to find out who broke into Reilly’s apartment. In July last year Humphrey and his wife and business partner, American citizen Yu Yingzeng, were arrested by Chinese police over charges that they had illegally bought and sold personal data of Chinese citizens.

What is the GSK China Bribe Scandal Really About?

“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”

no 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.”

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.”

“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)”

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.

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

Friday, August 08, 2014

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


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.


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.


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.


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.


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.


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…


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.


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?”


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.


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.

GSK’s China Bribe Scapegoats?

China prosecutors charge GSK-linked investigators with illegally obtaining data

SHANGHAI Fri Aug 8, 2014 8:02am EDT

Peter Humphrey (center L) and Yu Yingzeng (center R) stand trial at Shanghai No.1 Intermediate People's Court, August 8, 2014.  REUTERS- Shanghai No.1 Intermediate People's Court-Handout via Reuters
An internal court video shows British investigator Peter Humphrey arriving at a courtroom after a lunch break, during his trial at Shanghai No. 1 Intermediate People's Court August 8, 2014. REUTERS-Carlos Barria
The logo of GlaxoSmithKline (GSK) is seen on its office building in Shanghai July 12, 2013. REUTERS-Aly Song

1 OF 6. Peter Humphrey (center L) and Yu Yingzeng (center R) stand trial at Shanghai No.1 Intermediate People’s Court, August 8, 2014.


(Reuters) – Chinese prosecutors on Friday charged a British investigator and his American wife with illegally obtaining private information in a case that could be key to a bribery investigation against GlaxoSmithKline Plc.

Peter Humphrey and Yu Yingzeng ran risk consultancy ChinaWhys, whose clients included GSK, and their testimony is being closely watched for any comments on the British drugmaker.

The couple’s arrest over a year ago coincided with a government probe into allegations that GSK staff had funnelled hundreds of millions of pounds through travel agencies to bribe local doctors and health officials to boost sales and raise prices.

The prosecutors, laying out the charges at the start of the trial, said the couple had illegally obtained more than 200 items of private information, including household registration data, real estate documents and phone records, and then re-sold the data. GSK was not mentioned in the charge sheet.

According to the court’s official microblog, Yu said she did know that the third-party consultants ChinaWhys had hired to get the data had done so illegally.

“In other countries, we were able to conduct similar checks, including personal information and private transactions, legally through courts,” said Yu. “If we had known that it was illegal, my husband and I would have destroyed all traces of this information.”

While Chinese authorities have not openly connected the arrest of the couple to the GSK probe, Humphrey said in a note last year when he was already in detention that he felt “cheated” by GSK, adding that the drugmaker had not shared the full details of the bribery allegations.

A GSK spokesman has declined to comment on the trial. The drugmaker said in July that the issues relating to its China business were “very difficult and complicated.”

Foreign reporters were given unusual access to the trial after lobbying by the U.S. and British embassies.

The court’s microblog was updated regularly. A television in the media room also momentarily broadcast a grainy image which showed Humphrey, dressed in a polo t-shirt and jacket, sitting down inside the courtroom. He appeared to look weary.

The couple’s son, Harvey, was also in the courtroom with embassy officials.


The trial has unnerved China’s risk consultancy community, whose members are much in demand by multinationals and foreign investors for information on potential partners or firms in China, where such data is not easily available.

It also coincides with a growing number of Chinese anti-trust probes that have seen authorities raid offices of Western firms, highlighting the obstacles foreign companies face in navigating China’s murky business world.

Foreign firms must adhere to anti-corruption laws while operating in China amid more stringent enforcement of the U.S. Foreign Corrupt Practices Act and an increase in the number of Chinese firms involved in overseas deals.

Humphrey is expected to plead guilty to the charges, which carry a maximum sentence of 3 years in jail. A verdict in the trial could take up to a month.

He worked for Reuters as a journalist in the 1980s and 1990s, and has previously apologised on state television for breaking any Chinese law.

In testimony read out in court, Humphrey said the due diligence services offered by ChinaWhys largely relied on publicly available records and interviews with executives.

“For projects that required background checks, we engaged a third-party consultancy that provided household registration data. We were only paying for their services; we never purchased or obtained such data directly ourselves,” he said, according to a transcript released by the court’s official microblog.

Humphrey also said he had not sold the private information obtained.

China has in recent years moved to tighten its privacy laws. In 2009, it amended its criminal code to ban the transfer, sale or gathering of Chinese citizens’ information by government firms and companies involved in telecoms, transportation, education and medical treatment.

(Additional Reporting by Engen Tham and Fayen Wong; Editing by Miral Fahmy)

GSK detective held in China visited by son

GSK detective held in China visited by son

Peter Humphrey - undated still from CCTVPeter Humphrey and his wife were arrested in August 2013

Related Stories

The son of a detained private investigator who is linked to a GlaxoSmithKline corruption investigation in China has been allowed to visit his father.

Harvey Humphrey has not seen his father, Peter, since his arrest more than a year ago.

The businessman and his wife, Yu Yingzeng, have been charged with illegally obtaining data.

Harvey Humphrey, 19, has told the BBC that his parents appeared well.

The British businessman is facing trial in China, and is being kept at a detention centre in Shanghai.

Mr Humphrey and his wife are accused of illegally obtaining information after their private investigation company was employed by GlaxoSmithKline to investigate internal allegations of bribery and corruption at the heart of the company’s China operations.

Harvey Humphrey told the BBC that his mum and dad appeared in better health than he expected ahead of their trial, which is due to take place next week.


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