Dun & Bradstreet halts China unit operations amid probe

Mon Mar 19, 2012 2:02am EDT
 

(Reuters) - Dun & Bradstreet (DNB.N: Quote), a business information firm, said some of its local employees in China may have violated U.S. anti-bribery laws, and it had suspended operations at one of its local units pending an inquiry.

Dun & Bradstreet, formed from a 1933 merger of two rival credit reporting agencies, said it was looking into allegations that data collection practices at Shanghai Roadway D&B Marketing Services Co, which it bought in 2009, may violate Chinese consumer data privacy laws.

In a statement, Dun & Bradstreet said the Shanghai Roadway unit had 2011 revenue of around $23 million and operating income of $2 million. Total group revenue last year was $1.76 billion.

Besides the data collection practices, D&B said it was reviewing complaints that local employees may have violated the U.S. Foreign Corrupt Practices Act (FCPA) and other laws at its China operations.

The company gave no specific details of the allegations, but said it was cooperating with the Chinese investigation and has voluntarily reported the matters to the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

Calls to the Shanghai Roadway D&B Marketing Services unit went unanswered on Monday, and attempts to visit the company's website generated an error message.

A report in the Shanghai Daily newspaper cited Shanghai police as saying they had confiscated four computer servers at the unit's headquarters and questioned three senior executives.

State television said the company had private information including income levels, jobs and addresses for some 150 million Chinese residents and had sold individuals' details for 1.5 yuan (23 cents) each to companies involved in marketing or phone sales, the newspaper reported.

The report said the company had collected personal information from banks, insurance companies and real estate agents as well as from cold-call companies.

Shares in Dun & Bradstreet, valued at around $4.1 billion, have gained 48 percent in the past 6 months and last week hit a 13-month high.

(Reporting by Sakthi Prasad in BANGALORE and Ken Wills in BEIJING; Editing by Muralikumar Anantharaman and Ian Geoghegan)