China Raids Offices of WPP Unit GroupM, Detains Executive
Shanghai raid comes as China takes an increasingly tough stance on foreign businesses
Chinese police have raided the Shanghai offices of GroupM, a media-investment group and unit of London-based WPP WPP -2.22%decrease; red down pointing triangle, and detained an advertising executive, said a person familiar with the matter.
Police questioned other local executives during the raid, including GroupM’s Chief Executive in China Patrick Xu, the person said.
Xu couldn’t be reached immediately for comment. Shanghai police didn’t respond to a comment request.
Media outlets including the Financial Times reported earlier on the raid and detention.
China has been taking an increasingly tough stance on foreign businesses, even as its leaders also call for more foreign investment to support a slowing economy.
This year, Chinese authorities have raided the offices of due-diligence firm Mintz Group, questioned the staff of U.S. consulting firm Bain & Co. and implemented strict new data rules. Police also raided the offices of expert-network consulting firm Capvision, which worked closely with foreign consulting firms in China.
Chinese authorities have barred some executives working for foreign firms from leaving the mainland. This week, Tokyo said that China formally arrested an executive from Japanese pharmaceutical firm Astellas Pharma, who had been detained since March.
Driving much of that is Chinese leader Xi Jinping and Beijing’s growing emphasis on national security. In July, China started enforcing an updated anti-espionage law that gives the state greater control over a range of digital activities.
These moves have damaged American businesses’ confidence in China, which is at its lowest level in decades. While many foreign companies continue business activities in the country, executives have also cited growing concerns over China’s opaque law and business environment.
It couldn’t immediately be learned why GroupM was raided and its executive detained, and whether the investigation has any links to national-security issues.
GroupM parent WPP is the world’s largest ad holding company, whose agencies include Ogilvy, Wunderman Thompson and VMLY&R. China is WPP’s fourth-biggest market according to the company’s 2022 annual report. WPP recently announced it would combine VMLY&R and Wunderman Thompson.