Authorities in China raided the Beijing offices of Mintz Group, an American corporate intelligence firm, and arrested all five of its Chinese employees, the company said on Friday.
The Mintz Group said in a statement that authorities had halted operations in Beijing. The company has not been able to contact the employees since they were taken away.
It was unclear what the authorities’ objectives were in investigating the company, and the government did not respond to a request for comment. But the move highlighted the potential risks companies 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 tightened the ruling Communist Party’s access to information has.
“We can confirm that the Chinese authorities have arrested the five employees of Mintz Group’s Beijing office, all Chinese nationals, and shut down our operations there,” Mintz said in a statement. The Chinese nationals were arrested on Monday, said two people familiar with the investigation, who spoke on condition of anonymity for legal reasons.
The New York-based Mintz Group performs due diligence work – background checks, asset tracing, and fraud and corruption investigations – on companies before they make acquisitions or other large investments. The company says it has over 450 investigators in 18 offices around the world.
Such work has been the target of the Chinese authorities in the past. In 2013, Shanghai authorities arrested British investigator Peter Humphrey and his wife and business partner Yu Yingzeng, an American. They had operated a corporate investigation firm, ChinaWhys, which also conducted due diligence for multinational companies.
Both were accused of violating the rights of private individuals by obtaining private information about them. Each spent two years in prison before being released and allowed to leave China.
Even as China tightens security policies, Beijing officials have also tried to persuade foreign companies to reinvest. China almost completely closed its borders for nearly three years during the pandemic, but lifted its “zero Covid” policy in early December and began reopening its borders in early January.
The raid comes as an annual meeting of multinational chief executives and senior Chinese government officials, known as the China Development Forum, was due to open on Saturday. Chinese economic leaders have hoped the meeting would be a chance to restore international investment confidence in China.
Tim Cook, Apple’s CEO, and Ray Dalio, who founded the world’s largest hedge fund, Bridgewater Associates retired last year, should participate in the forum. But few other prominent American leaders will attend or speak at the forum this year. Many American companies have worried about being caught between pressure from the Chinese government to express their support and pressure from Congress to show they stand up to Beijing on issues like human rights and be silent.
