China's arrest of British private investigator Peter Humphrey and his American wife Yu Yingzeng last summer was a shock to the pharmaceutical community, as Humphrey's firm, ChinaWhys, had long provided assistance to drug companies trying to navigate that country's complicated business environment. Now it looks as if the two are going to be tried privately--in a closed-trial procedure that China normally reserves for cases involving national security or state secrets.
Humphrey and his wife were detained as part of a widening probe into the conduct of multinational pharmaceutical firms in China, most notably GlaxoSmithKline ($GSK), which was accused by authorities there of managing a $489 million bribery scheme aimed at boosting sales. Last April, GSK hired ChinaWhys to investigate a former employee suspected of sending out e-mails related to the bribery allegations, as well a sex tape of former GSK China chief Mark Reilly and his girlfriend. Shortly thereafter, Humphrey and Yingzeng were arrested for allegedly buying and selling private information.
The couple's family is confused and concerned about the private trial, their 19-year-old son said in a statement obtained by Reuters. "This does not involve state secrets. This does not involve national security," said Harvey Humphrey. "I am surprised at this decision since China wants to promote openness and the rule of law and I hope that they will let me in."
Although Chinese officials haven't openly acknowledged a link between the ChinaWhys and GSK cases, salacious details about the two companies' association are starting to emerge. Earlier this week, several news outlets reported that an ex-GSK employee e-mailed the sex tape--which was allegedly made without the knowledge of Reilly and his girlfriend--to the company's CEO, Andrew Witty, and other top execs. Citing serious security concerns, GSK hired ChinaWhys to investigate, as part of a job it code-named "Project Scorpio."
On Sunday GSK released a statement reiterating that it has "zero tolerance" for corruption and continues to make "fundamental changes" to its China business. It has overhauled its China team and embarked on an independent legal review. Meanwhile, the company's sales have dropped 30% in China and Reilly could be facing prison time.
As for Humphrey and his wife, their trial appears to be closed even to officials from the U.S. consulate, according to family friends who spoke anonymously to Reuters. The trial is expected to start August 7.
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