China probes Capvision in latest raid on foreign company

Investigation into Capvision comes after recent police raids on Bain & Company and Mintz Group.

A Chinese flag at half mast against the Shanghai skyline.
Shanghai-headquartered Capvision is the latest foreign company to face scrutiny by authorities [File: Aly Song/Reuters]

Chinese authorities have launched an investigation into global consulting firm Capvision in the latest national security probe to highlight the risks facing foreign companies in China.

The probe comes after authorities discovered that foreign consulting firms had been used by overseas institutions to obtain sensitive information including state secrets, Chinese state media CCTV said on Monday.

“Capvision accepted a large number of consulting projects from overseas companies on industries sensitive to China, and some of these firms had close ties with foreign governments, military and intelligence agencies,” CCTV said during a 15-minute television segment.

CCTV did not elaborate on whether Capvision had been sanctioned but said the country’s national security authorities had dealt with the firm “in accordance with regulations”.

A separate state media report said Capvision’s offices in the eastern city of Suzhou had been raided by authorities and that the law enforcement operation also involved offices in Shanghai, Beijing and Shenzhen.

The investigation comes after Chinese law enforcement last month questioned staff of United States-based consulting giant Bain & Company, and in March raided the Beijing office of US due diligence firm Mintz Group and detained five staff.

Capvision, which has headquarters in New York and Shanghai, did not immediately respond to a request for comment but said in a statement posted on WeChat that it would adhere to China’s national security regulations and lead the way in ensuring industry compliance.

China has tightened its scrutiny of foreign companies in recent months, including the passage of a sweeping expansion of its anti-espionage laws.

The US Chamber of Commerce earlier this month expressed concern about the heightened scrutiny of US firms in the country, warning that investors would “not feel welcomed in an environment where risk can’t be properly assessed and legal uncertainties are on the rise”.

The heightened scrutiny comes despite efforts by Beijing to reassure investors that China is open for business after nearly three years of strict pandemic curbs and repeated crackdowns on private industry.

Chinese Premier Li Qiang told a gathering of the Chinese Communist Party in March that entrepreneurs and private businesses would “enjoy a better environment and broader space for development” in the coming years.

Source: Al Jazeera and news agencies