China's new breed of whistleblowers takes on big business
By Adam Jourdan
SHANGHAI (Reuters) - Chinese lawyer Hao Junbo wants to make you rich if you're a whistleblower after a bounty. For big business in China he's a headache, part of a small but fast-growing industry built around exposing corporate wrongdoing.
The U.S. Securities and Exchange Commission received a tip-off a week from China last year, double the year before and five times more than in 2011. The attraction is a recently bulked up offer for as much as 30 percent of any fine if new information leads to the recovery of investor money over $1 million. Last year, one Wall Street whistleblower pocketed $14 million.
The SEC is just one of many channels for this new breed of Chinese whistleblowers whose information has helped lead to investigations in China of firms including British drugmaker GlaxoSmithKline Plc (GSK.L: Quote) and French dairy Danone SA(DANO.PA: Quote).
"It can't be denied that the financial benefits are an important incentive," said Hao, a Beijing-based whistleblower lawyer. Hao advertises online for whistleblowers to get in touch for the chance to "uphold justice and win a huge bounty too", though he concedes he is yet to collect a reward.
Hao said signs of stronger government support for Chinese whistleblowers had helped the sector come out into the open, with 150,000 tips investigated by authorities last year. But there is still a way to go to catch up with the well-established "no-win-no-fee" lawyers in the United States and Europe.
Indeed, blowing the whistle in China can be a risky proposition, with those who come forward often facing a backlash from the local officials or businesses they accuse.
"Because some clients don't want to reveal their identity, they hire us lawyers to blow the whistle on their behalf," said Hao. His cut is a negotiated slice of any final bounty.
JOINING BATTLE Continued...