GSK Sex Tape Investigators' Trial Begins In China

A British-American couple employed by pharmaceutical giant GlaxoSmithKline plc (LON:GSK), facing allegations of breaching privacy laws in China, have not disputed the charges at the start of their trial Friday, reports said.

Peter William Humphrey, a 58-year-old Briton, and his American wife, Yu Yingzeng, 60, who were arrested last year, were hired by the British firm to investigate the source of a sex tape that involved the boss of GlaxoSmithKline or GSK’s China operations shortly before bribery charges were leveled against the company by Chinese authorities, Agence France-Presse, or AFP, reported. The case has raised concerns among foreign investors in China, who typically hire independent investigators to run background checks on local companies.

“It's serious and such behavior is against Chinese criminal law,” the prosecutor said, while reading the indictment against the couple who are accused of illegally obtaining more than 200 records of Chinese citizens between April 2009 and July 2013, and then reselling the sensitive information, the Wall Street Journal reported.

At the Number One People's Intermediate Court in Shanghai, when the couple was asked if the indictment is correct, Humphrey said, “In general, it looks as if there is nothing wrong. But regarding the indictment, I don't understand the Chinese law so I'm not in a position to comment,” the court's official micro-blog account quoted him as saying. “The majority of our work is through the public information and accomplished using our brains,” Humphrey reportedly added.

When asked about the use of private information such as the personal identification numbers of Chinese citizens, he said that “it's not us who went out to acquire the information,” the Journal reported.

Humphrey, a former journalist and long-time resident of China, founded an investigation agency called ChinaWhys, which was hired by GSK to investigate the origin of a sex tape involving former GSK China Boss, Mark Reilly, and a girlfriend. Humphrey was arrested along with his wife Yu, who held the position of general manager at ChinaWhys. In May, police had arrested Reilly on charges of ordering GSK employees to bribe local officials.

Several foreign pharmaceutical companies are being investigated by Chinese authorities over issues such as pricing and bribery of local officials and doctors. China’s health care sector is widely considered to be riddled with corruption, due to the lack of transparency in the system along with poorly paid doctors who are susceptible to bribery.

The maximum penalty for illegally obtaining and selling personal information in China is a three-year prison sentence, legal experts reportedly told state media.

The Shanghai court said the trial was open to the public but did not permit foreign media to enter the courtroom, AFP reported. Instead, they were asked to watch online published summaries of the courtroom proceedings in an anteroom on a large computer screen.