Rahat Kapur
Oct 22, 2023

Shanghai's economic police confirm GroupM executive detained on bribery charges

Following yesterday’s report in Campaign Asia-Pacific, the Shanghai Economic Investigations Department has released an official statement implicating three members of GroupM on bribery charges, including two former employees.

Shanghai's economic police confirm GroupM executive detained on bribery charges

In a follow-up to yesterday’s news of the unfolding GroupM (WPP) detainments and raids in ShanghaiCampaign Asia-Pacific has learned that Yao Lan, GroupM China’s ex-head of Data Centre, Rycan Di, chief investment officer for China and Diana Hong, ex-general manager for GroupM China have all been detained by Shanghai’s Economic Investigations Department (ECID) on the grounds of bribery charges, as per an official statement posted on their Chinese social media site page.

GroupM CEO and country managing director Patrick Xu, who was also understood to be questioned during the raids on Friday, is not mentioned in the statement.

In a Weibo post by the ECID on Saturday 21 October at 19:08pm, the Department issued a formal notice stating that together with the Marketing Supervision Department, they uncovered a bribery case involving a senior executive at an advertising company, who has been detained. As per the translated text, the ECID’s preliminary investigations have been running from 2019 to February 2023. It also notes that Di, Yao and Hong were criminally detained in accordance with the law for taking advantage of their positions and facilitating large bribes, whilst working in an advertising company. 

Yesterday Campaign Asia-Pacific (in accordance with multiple sources) reported it was understood that the alleged nature of the detainments pertains to possible media broker activities—specifically in relation to how rebates are distributed to agencies and their employees.

GroupM civil legal complaint with Tensou Media in 2019 

In a separate incident in 2018, Campaign Asia-Pacific reported a public altercation had occurred on the WPP Campus in Shanghai over a payment issue involving GroupM. The video of the altercation (which was circulated on Chinese social media at the time) showed a dispute unfolding between a group of women reportedly representing Tansuo Media—a Hangzhou-based over-the-top (OTT) programmatic buying agent GroupM worked with—and staffers from GroupM China. Rycan Di was also present in the video. The women had accused the media agency of non-payment, and the matter was escalated to local police at the time, before being filed as an official civil legal complaint a few months later.

In June 2019, as a follow-up, Campaign China conducted an interview with Tina Shao, marketing director of Tansuo Media at the time. She confirmed the incident did revolve around a payment dispute between Tansuo Media and GroupM, specifically their legal entity QunShi. The entity was wholly owned by WPP, with now-CEO of GroupM China Patrick Xu as its main legal representative at the time. 

According to Shao, Tansuo Media became one of the programmatic buying sales agents of GroupM in 2016, and until 2017 their work engagements were in line with standard practices. However, Shao indicated that towards Q2 of 2017, GroupM's internal procurement processes changed, leading to a shift in the hierarchy of programmatic buying brokers designated by GroupM, and complicating the payment process.

In March 2018, Shao stated that Tansuo refused to accept sales orders from GroupM’s designated brokers (though they eventually reached a compromise). When asked why, Shao said they resisted working with the designated brokers for GroupM because they lacked understanding about the advertising industry, particularly in the OTT context—and as per Tensuo’s legal team, the lack of knowledge made the situation risky from both a financial and legal perspective. It also raised concerns about different credit terms and rebate amounts that the brokers might offer.

Shao shared that despite prolonged meetings and negotiations with Di and other executives in a bid to recuperate the outstanding remuneration owed of US$4.3 million (RMB30 million, later revised to US$1.16 million/RMB8.5 million after some payments were made) for unpaid advertising work, the matter was not resolved. 

She noted the meeting was “unpleasant” and Tensuo’s chairman and general manager Dong Dawei became unwell after it ended, before eventually passing away not too long after. Tensuo issued an obituary stating Dong had died due to the default in payments and long-term pressure on company funds, as well as from mental stress related to the incident.

Campaign Asia-Pacific is currently investigating if there is any link between the Tensuo Media incident and the most recent detainments.

GroupM’s Responsible Investment Framework

In April 2021, GroupM revealed the reorganisation of their business based on their ‘Responsible Investment Framework’. The WPP agency announced the framework via their website, sharing it was designed in a way that “reflects our stand that scale should be leveraged for social good and expands, scales and assembles existing and in-progress initiatives​ by GroupM in these areas under the singular strategic position of ‘Responsible Investment’. It represents a road map for reducing brand risk and building a more sustainable media ecosystem.”

The framework consists of five key pillars including brand (and public) safety, platforming diverse voices and inclusive representation, the ethical use of data and application of AI to advertising, investment in responsible journalism and hard news, and decarbonising the media supply chain by 2030.​

At the heart of it, the framework champions transparency, socially-conscious media investment, and ethical usage of data as the ethos of GroupM.

Campaign Asia-Pacific reached out to WPP who have declined to comment. More as this story develops.

Shawn Lim has contributed to this story.

Source:
Campaign Asia

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