Updated: 08/08/2014 17:01 | By Agence France-Presse

GSK-linked investigator does not dispute China charges: court

A British investigator once hired by scandal-hit pharmaceutical giant GSK in China went on trial Friday for breaching privacy laws, with the court saying he did not generally dispute the accusations.

GSK-linked investigator does not dispute China charges: court

Peter Humphrey (2nd L), a British investigator once hired by scandal-hit pharmaceutical giant GSK in China, and his US wife Yu Yingzeng (C-in red) stand trial at the Number One People's Intermediate Court in Shanghai, August 8, 2014

Peter Humphrey and his American wife Yu Yingzeng were hired to investigate the source of a lurid sex tape of the China boss of GlaxoSmithKline (GSK), shortly before the British firm became embroiled in bribery allegations.

GSK is the most high-profile target of wide-ranging Chinese inquiries into foreign pharmaceutical firms, as Beijing also mounts probes into overseas companies in sectors ranging from cars to baby milk.

But at no point did prosecutors mention the British firm when questioning Humphrey or Yu on Friday, according to transcripts posted online by the court.

Chinese prosecutors accused the couple of illegally obtaining more than 200 items of information on Chinese individuals, which they resold to clients.

"Generally speaking... I don't dispute (the prosecutor's indictment)," Peter Humphrey told the Number One People's Intermediate Court in Shanghai, it said on a verified microblog account.

It posted a picture of Humphrey facing a judge wearing a dark suit while Yu wore a smart red jacket, each of them with an arm gripped by a uniformed officer.

Foreign media were not allowed into the courtroom.

"We sold consulting services, which sometimes included personal information," Humphrey said according to the court, adding that he was unclear about the relevant laws and details of particular cases.

"We asked other companies to help us to obtain people's household registration information, and we would pay a fee" for the service, he said.

He denied an accusation that he had "tailed" clients, but said he may have sent staff to "stand outside" an office to monitor it.

"The services we supplied aim at reducing risks, especially risks in regard to fraud and corruption," he added.

Yu said she had "no dispute with the evidence provided by the prosecution," but denied that she had sold personal data to other firms. 

"We gathered information not so we could sell it, but so we could write reports," she said, adding that household registration data was obtained to check on corruption.

"Using the name of a family member to commit crimes is a common phenomenon in China, its something of a social illness," she added.

"If we had known at the time obtaining information in that way was illegal, we would have told our clients that we couldn't use those methods."

At least one translator and three defence lawyers were present, the court said.

- Conviction rate -

The case has raised concerns amongst foreign investors in China, who often hire independent investigators to conduct due-diligence investigations into Chinese companies.

Chinese courts have a near-perfect conviction rate in criminal cases -- 99.93 percent last year -- and the couple are almost certain to be found guilty.

State media have cited legal experts saying the maximum penalty for illegally obtaining and trading personal information is three years in prison.

Chinese authorities are investigating several foreign pharmaceutical firms over pricing and other issues.

GSK has been accused of systemic corruption, and in May its former China boss Mark Reilly was charged with ordering employees to bribe hospitals, doctors and health institutions to gain billions of dollars in revenue.

China's healthcare sector is widely considered to be riddled with graft, partly the result of an opaque tendering system for drugs and doctors' low salaries.

Humphrey, a former journalist and longtime China resident who founded an investigative firm, ChinaWhys, was reportedly hired by GSK to look into the origin of a covertly filmed video of Reilly and a girlfriend.

Humphrey's wife worked as ChinaWhys' general manager.

The duo have been paraded in prison suits by state broadcaster China Central Television (CCTV), which earlier aired a televised "confession" by an unshaven Humphrey.

China originally said the couple's trial would be held in secret, but the Shanghai court said last month it would hold "open" proceedings.

In practice that has meant the delayed transcripts of the trial being posted on the microblog account, which was being shown on a screen to reporters in a separate room in the court building.

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