Two months after charging three China-based executives of GlaxoSmithKline ($GSK) with bribery, that country is coming down hard on a British private investigator and his wife for their alleged roles in the widening scandal. British private investigator Peter Humphrey and his wife Yu Yingzeng, who is an American, have been indicted for illegally collecting private information on Chinese citizens, according to the state's news agency, Xinhua.
Humphrey's consulting firm, ChinaWhys, was hired by GSK last year to investigate a former employee suspected of sending out emails related to an alleged $489 million bribery scheme. Last August, Humphrey and his wife were arrested, and they are scheduled to be tried in a closed procedure starting early next month.
Now, prosecutors in China are saying that the couple "illegally trafficked a huge amount of personal information on Chinese citizens to seek profits," Xinhua writes. That information included home registrations, background on family members, and call logs. The two allegedly bought some of the information illegally. They are also accused of tailing people and secretly photographing them, according to Xinhua. It is China's first indictment of foreigners on charges of illegal investigation.
Humphrey was shown on Chinese TV last year, saying he and his wife "deeply regret" breaking any laws, according to the London Evening Standard. But the story he's now telling the press is somewhat more bitter. In a note obtained by Reuters, Humphrey said he felt "cheated" by GSK, and that the company had not shared the full details of the bribery allegations with him.
Meanwhile, U.S. officials have stepped in to demand more transparency in the trial of Humphrey and Yu, scheduled for Aug. 7. China has barred all outsiders, even the couple's 19-year-old son. A U.S. embassy spokesman told Reuters last week that consular officials should be allowed to attend the trial, under a 1982 agreement between the two countries. The British embassy also is pressuring China to open up the trial proceedings.
The trouble in China continues to weigh heavily on GSK. Former China chief Mark Reilly, who is accused of masterminding the scheme to bribe doctors to prescribe the company's drugs, could be facing significant prison time if found guilty. GSK's sales have fallen 30% in China, once considered one of its most promising growth markets. And there's even a sex tape in the mix: A GSK employee that Humphrey was hired to investigate allegedly made a clandestine recording of Reilly and his girlfriend and e-mailed it to several top execs, including CEO Andrew Witty.
Special Report: Top 10 drugmakers in emerging markets - GSK