The Mercury News
U.S. due-diligence firm says China detained its employees
Authorities in China have raided the Beijing office of the Mintz Group, a U.S. corporate investigations firm, and detained all five of its Chinese employees, the company said Friday.
Mintz Group, which has offices in San Francisco, said in a statement that authorities closed its operations in Beijing. The company has not been able to contact the employees since they were taken away.
It was unclear what authorities' objectives were in investigating the company, and the government did not respond to a request for comment. But the move highlighted the risks that firms involved in due diligence face in China as Xi Jinping, the country's top leader, has repeatedly called for a greater emphasis on security and has tightened the ruling Communist Party's grip on information.
“We can confirm that Chinese authorities have detained the five staff in Mintz Group's Beijing office, all of them Chinese nationals, and have closed our operations there,” Mintz said in a statement. The Chinese nationals were detained Monday, said two people familiar with the investigation who spoke on condition of anonymity because of legal sensitivities.
The Mintz Group, which is based in New York, does due-diligence work — background checks, asset tracing, and fraud and corruption investigations — for companies before they make acquisitions or other large investments. The company says it has more than 450 investigators in 18 offices around the world.
Such work has been the target of Chinese authorities in the past. In 2013, Shanghai authorities arrested a British investigator, Peter Humphrey, and his wife and business partner, Yu Yingzeng, an American. They had operated a corporate investigations firm, ChinaWhys, that also did due diligence for multinationals.
Both were charged with violating the rights of private citizens by obtaining private information about them. Each spent two years in prison before being allowed to leave China.
Even as China tightens security policies, Beijing officials have also been trying to persuade foreign companies to resume investing. China almost completely closed its borders for nearly three years during the pandemic but lifted its “zero COVID” policies in early December and began reopening its borders in early January.
News of the raid came as an annual gathering of multinational CEOs and senior Chinese government officials known as the China Development Forum was set to open Saturday. Chinese economic policymakers have been hoping that the gathering would be a chance to reestablish international investment confidence in China.