China says GSK-linked trial being handled according to law

BEIJING Tue Jul 8, 2014 5:11am EDT

A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in Shanghai July 12, 2013.  REUTERS/Aly Song

A flag (L) bearing the logo of GlaxoSmithKline (GSK) flutters next to a Chinese national flag outside a GlaxoSmithKline office building in Shanghai July 12, 2013.

Credit: Reuters/Aly Song

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BEIJING (Reuters) - The trial of a couple arrested last year following work they did for British drugmaker GlaxoSmithKline PLC (GSK.L) in China will be handled according to the law, China's foreign ministry said on Tuesday, brushing off U.S. concern about the case.

The trial of British investigator Peter Humphrey and his American wife Yu Yingzeng, set for Aug. 7, will be closed to the public, two family friends with knowledge of the matter said last week.

The U.S. embassy in Beijing said it was worried its diplomats would not be allowed to attend Yu's trial, adding a political dimension to the case, which could become another thorny issue between the two economic powers, especially as U.S. Secretary of State John Kerry is visiting China this week.

Chinese Foreign Ministry spokesman Hong Lei, asked whether China's handling of the case contravened diplomatic conventions, said there was "ample legal basis" for how the government was approaching the matter.

"China's judicial authorities are handling the relevant case according to law," Hong told a daily news briefing. "China is a country with rule of law."

He declined to elaborate.

The British embassy has also said it was "engaging" the Chinese authorities about the need for a transparent and fair trial.

The trial of Humphrey and Yu is part of a tangled web of probes into drugmaker GSK, which Chinese police accused last year of funnelling up to 3 billion yuan ($482 million) through travel agencies to bribe doctors and officials in China.

ChinaWhys, the risk consultancy run by the couple, was employed by GSK in April 2013 to investigate an ex-employee suspected of sending anonymous emails, including the circulation of an intimate video of former GSK China head Mark Reilly with his girlfriend, as well as emails containing allegations of widespread bribery at the British drugmaker.

Three months later, authorities detained Humphrey and Yu. Chinese authorities have not openly made a link between GSK and the case against ChinaWhys.

Reilly has been charged along with other GSK executives of widespread bribery and corruption, and could face decades in a Chinese jail.

Corruption is endemic in the Chinese pharmaceutical market, where bribes are often used to smooth business ties with underpaid doctors and hospitals which rely on drug sales for over 40 percent of their revenues.

(Reporting by Michael Martina; Writing by Ben Blanchard; Editing by Miral Fahmy)

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