WPP Employee, Others Under Investigation By Authorities In China

A GroupM employee and two former employees were detained last week in Shanghai by Chinese authorities, according to multiple reports including the Financial Times (which broke the story) and Reuters.  

Also GroupM China CEO Patrick Xu was reportedly questioned by police but not detained. Xu is also WPP’s country manager for China.  

It isn't precisely clear what is behind the detentions and investigation A source for Reuters said it was related to “rebate mismanagement,” but that is not confirmed. A WPP statement issued midday Monday indicated that the GroupM executive was arrested on charges of bribery and that he has been terminated from the company. The firm said it was cooperating with Chinese authorities on their investigation and conducting its own separate investigation as well. 



A source familiar with the situation stressed that WPP itself is not a subject of the investigation being conducted by Chinese authorities. That probe for now is limited to the individuals previously employed by the firm who were detained and others outside of the company. 

The development is significant as WPP sees Greater China as a major growth driver for the firm. It is the firm’s fourth largest market, and has three major hubs there including campuses in Shanghai and Hong Kong.  

The third campus opened earlier this year in Guangzhou. At the time, WPP said that 5,000 of the firm’s 8,100 people in the region were located on one of the three main campuses.  

Here is the full WPP statement issued on Monday:

"Following the detention of a GroupM China executive on charges of bribery last week, we are cooperating with the authorities and conducting our own investigation with an independent third party.

We cannot comment on the details of an active police investigation. However, we are terminating the executive’s employment with the company, and GroupM is suspending trade with any external organisation we understand to be part of the police enquiries. 

We are absolutely committed to behaving in accordance with the law and our own code of conduct, and will take all necessary action to ensure this is the case within our business."

This story has been updated with input from WPP and other sources. 

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