China-US Economic Ties

Capvision Vows to Defend China’s Security After ‘Rectification’

 

Consultancy firm Capvision Partners said it had completed its “rectification” as per Chinese regulators, five months after authorities raided its offices across the country over “national security issues”.

“Over these past months, under the guidance of the relevant government departments, our firm has earnestly reflected, identified holes and made up for shortcomings, building up a more systematic and complete compliance system,” Capvision said in a statement published on its official WeChat account.

“Our company… will take the lead in resolutely defending the bottom line of security in the development of the country’s consulting industry,” it said.

 

Also on AF: China Vows Anti-Corruption Crackdown on Financial Sector

 

The conclusion of Capvision’s ‘rectification’ process is the latest development in China’s sweeping crackdown on consultancy and due diligence firms this year.

Apart from Capvision, Chinese police had also raided the office of Bain and Company and detained staff of US-based investigative firm Mintz Group.

In August, China slapped a $1.5 million fine on Mintz for conducting “unapproved statistical work”. In days following the raids, sources close to the firm had said Mintz conducted investigative work around the suspected use of forced labour in Xinjiang.

In the case of Capvision, state broadcaster CCTV had cited police as saying the firm had received millions of dollars from overseas companies to lure experts to divulge sensitive information and even state secrets in exchange for high pay.

CCTV said Capvision’s network included more than 1,000 experts in defence and military areas and it accepted consulting jobs from overseas companies with close ties to governments, militaries and intelligence agents.

 

China’s national security ‘focus’

Following CCTV’s allegations, Capvision announced the creation of a compliance committee to implement Chinese “rectification requirements” .

The Shanghai-based firm, which specialises in putting experts in various industries in contact with firms and investors, also pledged to “resolutely abide” by China’s national security rules.

In its statement on Tuesday, Capvision said it realised the domestic consulting industry needed to “increase its awareness of safety issues and unexpected events, resolutely block lapses in management, and increase its capacity to proactively prevent” security risks.

Beijing has recently broadened the scope of national security work, with President Xi Jinping focused on preventing foreign states and corporations from obtaining intelligence on strategic sectors, such as technology and defence.

The push has seen China amending anti-espionage and cross-border data transfer laws, among other measures, and also cracking down on key sectors including technology, finance and healthcare.

 

 

Late last month, top decision-makers in Beijing also vowed to ramp up efforts against corruption in the financial sector, with an aim to weed out national security risks.

Top Chinese leaders have not been spared from the push either, with top officials including former foreign minister Qin Gang and defence minister Li Shangfu disappearing from public view amid reported probes into their activities.

 

  • Reuters, with additional editing by Vishakha Saxena

 

Also read:

 

China Bans Top Nomura Investment Banker From Exiting Mainland

 

Mintz Executive Caught in China’s Growing Web of Exit Bans

 

China’s Security Focus Undermining Its Economic Goals

 

Eyeing Top Dollar, China Consulting Firms Tested Beijing’s Limits

 

China Slaps Deloitte With $31m Fine Over Huarong Audit

 

China Orders Check on Auditors to Ensure Data Secrecy – FT

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at vishakha.saxena@asiafinancial.com

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