/

Briton arrested after admitting illegally gathering private data about Chinese

Bloomberg, AP

China’s Public Security Ministry said the British founder of a consultancy serving multinational companies confessed to illegally obtaining and selling private data on Chinese citizens.

Peter Humphrey, founder of ChinaWhys, and his wife, Yingzeng Yu, a U.S. citizen, have “expressed extreme regret for their actions, and have apologized to the Chinese government,” the ministry said in a statement Tuesday.

The couple, arrested in Shanghai on Aug. 16, were accused of illegally collecting personal information about Chinese citizens, including home addresses and names of family members and then selling the information in reports mainly to foreign companies such as manufacturers, financial institutions, and law firms, according to the bureau.

The statement made no reference to whether the arrests were connected to a bribery investigation of U.K. drugmaker GlaxoSmithKline PLC, which was reported by The Wall Street Journal to have hired the company, citing unidentified sources with knowledge of the situation.

The pair were first detained by authorities on July 10, Reuters reported, the day before the ministry announced that Glaxo executives were under probe.

Glaxo is being investigated on allegations it used cash and sexual favors to bribe doctors and health officials in the country to promote sales of its drugs. A government crackdown against corruption has extended to other foreign drugmakers and local hospitals since China announced the Glaxo probe.

Garry Daniels, a spokesman for Glaxo, said in an email on Aug. 21 that Humphrey has never been a Glaxo employee.

The Beijing government operates an extensive surveillance network to track China’s public but is tightening controls on access to personal information by companies and individuals.

Humphrey started ChinaWhys with his wife in 2003, and has about 100 clients a year with annual sales of several million yuan, according to the ministry statement.

On the ChinaWhys website, the company describes itself as “business advisers with eyes in China, walking multinationals through the labyrinth of opportunity, risk and unfamiliar cultural environment,” and listed services such as vetting of partners and “discreet gathering of timely business intelligence.”

The couple moved ChinaWhys’ office to Shanghai in 2009 and hired more than 10 employees, the Public Security Ministry said in the statement. Shanghai police searched ChinaWhys’ offices and found more than 500 research reports, of which dozens of copies “seriously violated the privacy of Chinese citizens,” it said, adding that investigations are continuing.