Chinese Trial May Not Be Linked to GlaxoSmithKline plc (ADR) (GSK)

Companies around the world, who do business in China were keeping a close watch on the  trial of the British company  investigator, Peter Humphrey, and his American wife and business partner, Yu Yingzeng. GlaxoSmithKline plc (ADR) (NYSE:GSK), which counts Joel Greenblatt and Francis Chou among its investors, had hired Humphrey’s firm to investigate a former employee, whom GlaxoSmithKline plc (ADR) (NYSE:GSK) believed was trying to tarnish one of company’s top executive in China. As recent reports from the trial suggest, Humphrey’s trial may not be linked directly to GlaxoSmithKline plc (ADR) (NYSE:GSK).

GlaxoSmithKline plc (ADR) (NYSE:GSK)

Eunice Yoon, CNBC‘s correspondent in Beijing, reported the recent developments in Humphrey’s trial.

“ Basically, many people believe that this case really highlights a lot of the difficulties that companies are facing right now in doing business in China and also the dangers to private investigators and consultancies that try to do due diligence on corporate investments here. Now, the British investigator in question here is a man named, Peter Humphrey, he and his American wife are very highly regarded here as corporate detectives and in fact, GlaxoSmithKline plc (ADR) (NYSE:GSK) hired them over a year ago, in order to look into the background of an employee, who the company suspected could have been a whistleblower,” Yoon said.

Yoon clarified that Humphrey’s trial is not officially linked to GlaxoSmithKline plc (ADR) (NYSE:GSK), even though many people believe it to be. She also mentioned that why people still believed the two to be linked, which she attributed to the sequence of events. The Humphrey couple was arrested soon after the news of the bribery scandal involving GlaxoSmithKline broke out. GlaxoSmithKline plc (ADR) (NYSE:GSK) was accused of spending hundreds of millions of dollars in bribing influential doctors and hospital staffs to increase the sales of the company.

“I spoke to the son, he said he is hoping for leniency in this case because his parents do face three years in prison here if they are indeed found guilty also like I said its ongoing and most people do not believe that we are going to have a verdict today,” Yoon added.

Later on Friday, after Yoon had reported on the case, the court in Shanghai announced its judgement. Peter Humphrey was sentenced to two years and six months in prison for illegally obtaining records on Chinese citizens, while his wife, Yu Yingzeng, was given a two-year jail sentence. Mr.  Humphrey and his wife were also fined 300,000 Yuan and 150,000 Yuan, respectively. The court has given the couple 10 days to file an appeal against the judgement.

Disclosure: None

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