News / Asia

Chinese Court Sentences Foreign Investigators to Prison

A combination photo shows British corporate investigators Peter Humphrey and Yu Yingzeng as they leave court in a police car in Shanghai Aug. 8, 2014.
A combination photo shows British corporate investigators Peter Humphrey and Yu Yingzeng as they leave court in a police car in Shanghai Aug. 8, 2014.

A Shanghai court has sentenced two foreign risk consultants to prison on charges of illegally obtaining personal information about Chinese citizens in a one-day trial that is part of a high-profile corruption probe targeting GlaxoSmithKline, the giant international pharmaceutical and health care firm.

The Shanghai No.1 Intermediate People's Court announced the verdict late Friday through its official microblog: Yu Yingzeng and Peter Humphrey —partners in business and marriage — were sentenced to two years and 2 ½ respectively.

The presiding judge said Humphrey could be deported, but did not say whether the same fate awaits Yu, an American citizen born in China.

The couple ran a risk consultancy firm called ChinaWhys, specializing in corporate fraud.

Prosecutors accused the couple of breaking China's privacy laws, which ban the purchase and sale of personal data such as residency information, phone records and overseas travel records.

Bought personal information

In court, Humphrey and Yu admitted they bought personal information about Chinese citizens from three Chinese companies. But they insisted the information was used to prove fraud and embezzlement, and made up only a small part of the reports they compiled for their clients.

“The most important part of those reports was investigation and analysis,” Humphrey said in court, according to official proceedings issued live on the microblog.

Both defendants said they investigated mergers, did background checks on partners or potential hires, and looked into corrupt practices on behalf of their clients.

GlaxoSmithKline probed

Their arrests last year coincided with a corruption probe of one of the couple's newest clients, British-based GlaxoSmithKline. The company was not mentioned directly during the Humphrey-Yu trial, however.

In his closing argument, Humphrey maintained that the couple's actions were in accord with the Chinese government's own campaign against corruption.

“Humphrey did put up a very spirited and effective self-defense, going so far to say that his career in China is comparable to the 'graft busters,' the anti-corruption operation launched by the party and government,” said Willy Lam, an adjunct professor at the University of Hong Kong's China Studies Center.

Lam said it was clear from the start that the couple's line of defense would not avert a guilty verdict, though they both “have been very cooperative with the authorities from the start.

“There is also the fact that they are foreigners,” Lam added. “So even though the Chinese have insisted on the independence of the judiciary in China, they do take into consideration China's relations with other countries.”

Humphrey and Yu have 10 days to appeal their conviction, but any reversal by the court is considered unlikely.

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by: Frankie Fook-lun Leung from: Los Angeles
August 11, 2014 6:26 PM
The sentencing is the most draconian part of this exercise. I think they will be released on medical grouns quietly. China has achieved its purpose by making them a show case.

by: Frankie Fook-lun Leung from: Los Angeles
August 11, 2014 2:00 PM
Certain business activities such as due diligence investigations can be traps for the unwary not so much that the law is unclear, its enforcement is hazardous. A doing it may be legitimate but not B. You may find out that A has a powerful background whereas B has not. Or some times, at one time it is tolerated but not at another time.

by: Frankie Fook-lun Leung from: Los Angeles
August 08, 2014 6:50 PM
The reason they were guilty is not because they conducted investigation. First, their investigation must have disturbed or upset certain interested parties in China who in the back stabbed them. Second, it gives a warning to any professional or investigative firms or individuals that even you have a foreign passport, or of foreign origin, in China, you are no body. You are just susceptible to criminal sanction as anybody else.

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