China detains staff, raids office of U.S. due diligence firm Mintz Group

WASHINGTON / BEIJING –

Chinese authorities raided the workplace of U.S. company due diligence agency Mintz Group in Beijing and detained 5 native workers, the corporate mentioned, placing overseas corporations in China on alert simply because the nation hosts a world financial discussion board.

News of the raid and detentions comes as Sino-U.S. relations have spiraled downwards following months of diplomatic tensions, together with over the U.S. army downing in February of a suspected Chinese spy balloon and a deliberate U.S. transit subsequent week by the president of Taiwan, the self-governed island China claims as its territory.

“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,” the corporate mentioned in an emailed assertion to Reuters late on Thursday.

It mentioned it was able to work with the Chinese authorities to “resolve any misunderstanding that may have led to these events,” and that its high concern was the protection and wellbeing of colleagues in China.

“Mintz Group has not received any official legal notice regarding a case against the company and has requested that the authorities release its employees,” the corporate mentioned.

Chinese overseas ministry spokeswoman Mao Ning mentioned on Friday she was not conscious of this case. The Beijing public safety bureau didn’t reply to a request for remark.

A supply on the New York-headquartered agency earlier instructed Reuters on situation of anonymity that the corporate’s native authorized counsel mentioned the raid occurred on the afternoon of March 20, and that the workers have been being held incommunicado someplace exterior of Beijing.

‘RED ALERTS’

As per Mintz Group’s web site, the Beijing workplace is its just one in mainland China. The web site says the corporate makes a speciality of background checking, reality gathering and inside investigations. Its wide-ranging purchasers embody the National Football League, New York City and The Beatles, in line with media experiences.

Mintz has 18 places of work around the globe and a whole lot of staff. Randal Phillips, a accomplice on the agency who heads its Asia operations however is predicated exterior of China, is listed on its web site because the Central Intelligence Agency’s former chief consultant in China.

Phillips labored in Beijing for years after leaving the CIA. There was no indication the incident was associated to him, and Reuters was unable to succeed in him for remark.

The news of the raid and detentions comes as Beijing is gearing as much as maintain the three-day China Development Forum from Saturday, the place executives from multinationals and representatives from worldwide organizations shall be among the many greater than 100 abroad delegates current.

One U.S. business group particular person instructed Reuters the Mintz Group incident despatched a “remarkable signal” that Beijing needs overseas cash and know-how however that it will not settle for credible U.S. corporations conducting due diligence on Chinese companions or the business atmosphere.

“Red alerts should be going off in all boardrooms right now about risks in China,” the supply, who didn’t want to be recognized because of the delicate nature of the matter, mentioned.

China has mentioned it welcomes overseas commerce and funding however harassed that safety comes earlier than improvement.

U.S. companies working in China are more and more pessimistic about their prospects on this planet’s second-largest economic system, in line with a survey launched this month by the American Chamber of Commerce in China.

Two-thirds of the respondents cited rising U.S.-China tensions as the highest business problem.

Western due diligence corporations have gotten into bother with Chinese authorities earlier than. British company investigator Peter Humphrey and his American spouse Yu Yingzeng, who ran threat consultancy ChinaWhys, have been detained in 2013 following work they did for British prescription drugs group GSK.

Humphrey, who spent two years in jail for allegedly buying private data by unlawful means, which he denied, instructed Reuters that offering due diligence in China was even tougher now due to a “massive tightening in access to information.”

“The foreign business community needs due diligence in order to conduct safe business, to pick the right partners and the right hires, to invest in the right companies without losing their shirt … But Beijing has made it impossible to do this,” he mentioned in an e mail.

“This is at a time when Western companies need transparency more than ever,” he added.

Reporting by Michael Martina in Washinton and Yew Lun Tian, Laurie Chen and Joe Cash in Beijing; Editing by Raju Gopalakrishnan, Muralikumar Anantharaman and Jane Merriman