British fraud investigator in China TV confession

Chinese state television on Tuesday aired a highly unusual public confession from a British fraud investigator detained for several weeks in the midst of a corruption probe into the activities of multinational pharmaceutical companies in China.

Disgraced public officials accused of crimes in China frequently make such apologies, but broadcasting one from a foreigner on national television is very unusual, legal experts said.

China Central Television broadcast a video showing Peter Humphrey, one of the country's best known corporate investigators, and his wife wearing handcuffs and orange prison vests within what appeared to be a police station. State print and broadcast media carried stories on Tuesday saying that Mr Humphrey and his wife and professional partner, Yu Yingzeng, who is a US citizen, had been arrested for illegally buying and selling the personal information of Chinese citizens for profit.

Mr Humphrey, his face digitally scrambled for the camera, is broadcast speaking in Chinese, in a contrite tone of voice, saying: "The way we acquired information was sometimes illegal. I feel very regretful about it and want to apologise to the Chinese government." No mention was made of GlaxoSmithKline, a former client of Mr Humphrey's company, and the focus of the current corruption inquiry into the Chinese pharmaceutical sector. Mr Humphrey and his wife, co-founder of their firm, Hong Kong-based risk advisory company ChinaWhys, were informally detained at about the same time that the GSK probe was made public in July.

Ms Yu was quoted in the Legal Daily as saying: "The market demand exists in this industry but some information is hard to acquire by legal methods. In order to meet the clients' requirement, we thus take illegal means to acquire it."

Mr Humphrey's appearance coincided with the end of the trial of Bo Xilai, the disgraced political leader, who cut a defiant figure in his five days in court during which he refused to make any apology. It also comes amid a high profile anti-corruption campaign driven by President Xi Jinping.

"It is very odd to have an admission of guilt by a foreigner on TV, especially as it was not in the context of a court proceeding. I can't think of another example," said one Shanghai lawyer. "Maybe it's part of the supposed greater move to court transparency that we also saw in the Bo trial, maybe they want to show that there was due process here."

Legal experts said Mr Humphrey, a former journalist who previously worked as China country manager for Kroll, the US risk consultancy, might be hoping for more lenient treatment because of his public contrition.

ChinaWhys specialises in fraud investigations and risk management services to help international companies comply with bribery laws such as the US Foreign Corrupt Practices Act. Tuesday's CCTV report said police had confiscated over 500 investigation reports from ChinaWhys' mainland offices, many of which "proved to have severely violated Chinese citizens' privacy". The records included details of "household registration [local residence certificate], car ownership, property ownership, and exit-entry [overseas travel] records".

The company paid Rmb800-2,000 ($130-$326) for each bit of information, and then sold it to clients, most of whom are multinational companies, financial institutions and law firms, for more than Rmb100,000 each, the report said.

Legal experts said China's law on personal data privacy is a catch-all law that can be used as a pretext for arresting individuals whose detention is viewed as useful for other reasons. However, they point out that the government has been actively prosecuting Chinese nationals for the crime of purchasing personal information recently as well. State media said 126 people have been taken in for 40 cases of illegal dealing in personal information just since August 7.

"The safeguarding of personal data has become a topic of great interest to China," said Dan Roules, an anti-bribery expert at the law firm Squire Sanders in Shanghai. "In recent months, there have been many reports of criminals being arrested or jailed for engaging in personal data theft. Exposing a foreigner who seems to have confessed to such crimes will capture the interest of readers and viewers."

Additional reporting by Zhang Yan

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

© The Financial Times Limited 2013. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation