GroupM Exec Banged Up In China

GroupM Exec Banged Up In China

A GroupM executive is thought to have been detained in China following a raid on its Shanghai offices and other employees have been questioned, according to people with knowledge of the matter.

The senior advertising executive has been detained for further questioning by the Chinese police and it is thought that the matter relates to their work at the agency.

Police also spoke to other local execs during the raid, including current GroupM China chief exec Patrick Xu, according to sources.

WPP declined to comment when contacted by the Australian Financial Review as did an officer at the Shanghai police station which oversees the area of GroupM’s offices.

GroupM is not the first foreign company to have faced heightened scrutiny from Chinese law enforcement in recent months. Police confiscated computers and questioned staff at consulting group Bain and detained five local staff of US-based due diligence firm Mintz Group.

Chinese state-owned media even aired a primetime broadcast of police searching the offices of networking group Capvision.

The Chinese advertising market, while incredibly lucrative — GroupM estimates put total Chinese ad revenue at around US$150 billion (AU$238 billion) this year, up almost eight per cent — is rife with corruption according to industry insiders. Advertising is worth around AU$58 billion to Australia’s economy in total.

Last month, for example, the US Securities and Exchange Commission reached a US$26 million settlement with US group Clear Channel Outdoor after it was found to have bribed Chinese government officials to obtain advertising contracts.

The country also recently passed a tougher anti-spying law that pushed a “whole of society” approach to security risks that encouraged all citizens to join the state security ministry’s fight against espionage. It also opened up a public media portal to broadcast stories of spying incidents.




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