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UK investigator jailed in China

A British man and his American wife have been handed prison terms on charges of illegally trading in the personal details of Chinese citizens after they testified that they bought such information to help companies combat fraud.

Peter Humphrey and Yingzeng Yu operated a firm in Shanghai that helped companies screen potential business partners and employees. Their arrest last August sent a chill through foreign businesses, and came as Beijing tightened controls over information and prompted warnings that investigation of legitimate matters might be curtailed.

After a one-day trial, Humphrey was sentenced by the Shanghai No 1 Intermediate Court to two-and-a-half years in prison to be followed by expulsion from China. Yu was sentenced to two years.

Humphrey was also fined 200,000 yuan (£19,300) and Yu 150,000 yuan (£14,500). The maximum possible penalty for illegally selling or providing personal information about Chinese citizens is three years in prison plus fines.

The judge, Yu Jian, said the defendants have 10 days to appeal once a written verdict is issued.

The couple’s 19-year-old son Harvey told reporters outside the court: “Very sad about the court’s verdict, but I hope that the authorities will take into account their poor health condition.”

Humphrey and Yu acknowledged having obtained personal details about Chinese nationals but said legal restrictions on such information were unclear.

Testifying in court today, Yu said 90-95% of the data they obtained came from household registrations that list family members and their birth dates.

Yu said such information was useful in revealing misconduct such as an employee setting up a competing company under a relative’s name. She said the firm was paid 20,000 to 200,000 yuan (£1,900-£19,300) per case.

“The purpose of our obtaining individual information was to help prevent and fight corporate internal corruption,” Yu said, according to a transcript released by the court.

Shanghai police have said reports prepared by Humphrey and Yu for clients “seriously violated the legitimate rights of citizens”. They contained home addresses and information on family members, real estate and vehicles. Clients included manufacturers, law firms and financial institutions.

Such information can make clear who controls a company or reveal family ties that might lead to conflicts of interest in a secretive Chinese business world dominated by behind-the-scenes connections. But the ability of investigators to reveal such links might alarm political leaders who want to hide wealth amassed by their family, and business figures who profit from ties to the ruling Communist Party.

In 2012, Communist leaders were embarrassed by news reports that disclosed details of the family wealth of Xi Jinping, the new ruling party leader, and Wen Jiabao, who was premier at that time.

Humphrey and Yu worked under contract for British pharmaceutical giant GlaxoSmithKline, which is accused in a separate case of bribing Chinese doctors and hospitals to use its products. Authorities have not indicated whether the two cases are linked.

Earlier today, Harvey Humphrey criticised GSK, which he said made trouble for his parents by hiring them for an investigation that “trod on several powerful toes”.

“The root of the problem really from where I’m sitting is the way GSK behaved in this matter,” he told Sky News.

GSK has said it hired the couple to investigate a security breach but not bribery allegations.

In July, Humphrey said on state television that he felt “betrayed and used” by Glaxo. He said he found out during his investigation that the bribery claims were true and said he would not have carried out the probe if he had known about them earlier.

A conviction appeared almost certain after state television showed Humphrey last year saying he used “illegal means” to obtain information.

Humphrey and Yu’s firm, ChinaWhys Ltd, said on its website it specialised in “discreet risk mitigation solutions” and investigations “walking multinationals through the labyrinth of opportunity, risk and unfamiliar cultural environment”.

At the time of their arrest last August, Shanghai police said they were investigating 126 people on suspicion of improperly gathering personal information and had detained 35. Few details of the other cases have been released.

Friday’s verdict identified three Chinese investigators from whom Humphrey said he purchased information. He said they obtained it from law firms and other sources.

Yu said that since 2011, the firm had significantly reduced the amount of personal information it gathered.

Yu went to the United States in 1981 at age 28 and later became an American citizen.

Humphrey, a former reporter for the Reuters news agency, has worked as an investigator for the past 14 years in Asia, according to his company’s website.

It said Yu has worked for or advised companies in the United States, Hong Kong and China over a 25-year business career.

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