This case demonstrates that investigation of individuals and companies in China is a highly hazardous business.

According to the Financial Times the Chinese state television aired a highly unusual public confession from Peter Humphrey, a British fraud investigator, detained for several weeks in the midst of a corruption probe into the activities of multinational pharmaceutical companies in China.  It is not unusual that disgraced public officials accused of crimes frequently make apologies, but broadcasting one from a foreigner on national television was regarded a unusual.

Peter Humphrey was arrested in Shanghai beginning on August while working for a pharmaceutical company.  Humphrey is the founder of Hong Kong-based risk advisory company ChinaWhys, which he co-founded with his wife, a US-educated fraud examiner. The company specializes in fraud investigations and risk management services to help international companies comply with bribery laws such as the US Foreign Corrupt Practices Act. He is a former journalist and previously worked as China country manager for Kroll, US risk consultancy, and as head of China investigations at PwC, the professional services group.

Legal experts said China’s laws on personal data privacy and state secrecy are broad enough to be used to justify his continued detention, even if Mr Humphrey and his wife procured the personal information involved only in the course of conducting an investigation on behalf of GSK.

Source:  Financial Times

BIIA Comment:  This case demonstrates that the collection of information on individuals and companies in China is a highly hazardous business.   On March 15th 2013 an ordinance for credit information came into effect.  It was hoped that the law would avoid situations such as in the case of Mr. Humphrey and others. 
While the law is now more specific on what type of data can be collected or what is off-limits, the ordinance still lacks sufficient specificity which may keep information professionals out of jail.  Guidelines of how the law should be interpreted have not been published and much of the data which is off-limits and considered as state- or commercial secrets are in the public domain in market economies but not yet in China.  This retards transparency and makes business transactions risky.  As we said before, for information companies it will be still a hazardous, if not an impossible undertaking to collect reliable and accurate data in China.  BIIA is in contact with the regulators.