Chinese authorities raided the office of US corporate due diligence firm Mintz Group in Beijing and arrested five local employees, the company said, fueling concern among foreign companies in China just as it hosts an international economic forum.
News of the raid and arrests comes as Sino-US relations plummeted after months of diplomatic tensions, including the US military shooting down of a suspected Chinese spy balloon in February and a planned transit to the US next week from part of the president of Taiwan, the self-governed island that China claims as its territory.
“We can confirm that Chinese authorities have arrested the five employees at Mintz Group’s Beijing office, all Chinese nationals, and shut down our operations there,” the company said in an emailed statement to Reuters on Thursday. evening.
It said it was ready to work with Chinese authorities to “resolve any misunderstandings that might have led to these events” and that his main concern was the safety and well-being of his colleagues in China. “Mintz Group has not received any official legal notice regarding a case against the company and has asked authorities to release its employees,” the company said.
China detains staff, raids office of US due diligence firm Mintz Group https://t.co/NtJULABCXR pic.twitter.com/oPETwFnhOs
— New York Post (@nypost) March 24, 2023
Chinese Foreign Ministry spokeswoman Mao Ning said on Friday she was unaware of this case. The Beijing Public Security Bureau did not respond to a request for comment.
A New York-based company source previously told Reuters on condition of anonymity that the company’s local legal counsel said the raid occurred on the afternoon of March 20 and that employees were being held incommunicado by some departs outside Beijing.
According to the Mintz Group website, the Beijing office is the only one in mainland China. The website states that the firm specializes in background checks, data collection, and internal investigations. His far-reaching clients include the National Football League, New York City, and The Beatles, according to media reports.
Mintz has 18 offices worldwide and hundreds of employees. Randal Phillips, a partner in the firm who runs its operations in Asia but is based outside of China, is listed on its website as the CIA’s former senior representative to China.
Phillips worked in Beijing for years after leaving the CIA. There was no indication that the incident was linked to him and Reuters could not reach him for comment.
News of the raid and arrests comes as Beijing prepares to hold the three-day China Development Forum starting Saturday, where multinational executives and representatives of international organizations will be among more than 100 foreign delegates in attendance. A person from the US business community told Reuters the Mintz Group incident sent a “remarkable signal” that Beijing wants foreign money and technology, but would not accept credible US companies conducting due diligence on Chinese partners or the environment entrepreneurial.
“Red alerts should be ringing in every meeting room right now about risks in China,” said the source, who declined to be named due to the sensitive nature of the matter. China said it welcomes foreign trade and investment but stressed that security comes before development.
American companies doing business in China are increasingly pessimistic about their prospects in the world’s second-largest economy, according to a survey released this month by the U.S. Chamber of Commerce in China. Two-thirds of respondents cited rising US-China tensions as the top trade challenge.
Western due diligence firms have already run into problems with Chinese authorities. British corporate investigator Peter Humphrey and his American wife Yu Yingzeng, who ran risk consultancy ChinaWhys, were arrested in 2013 after working for British pharmaceutical giant GSK.
An employee of another foreign company that provides due diligence services in China, speaking on condition of anonymity, said it was unclear whether the Mintz Group was an isolated case or part of a larger crackdown. Some companies “may now decide to take extra precautions when conducting due diligence assignments in China,” the employee added.
