China is preventing a business executive at a U.S. company from leaving its mainland, underscoring American fears of doing business with Beijing, The Wall Street Journal reported Friday.
Michael Chan, a senior executive at a U.S. risk advisory firm Kroll, has been prevented from leaving China’s mainland for the last two months amid an ongoing criminal investigation even though neither Kroll nor Chan is the subject of the probe, according to the WSJ. China regularly imposes exit bans against both its citizens and foreign nationals who are under or are helping with an investigation, though it has also been used for intimidation and to gain leverage against foreign countries and companies.
Kroll operates in corporate investigations, financial risk assessments and due diligence checks, according to the WSJ. Chan, the Hong Kong-based managing director of Kroll, traveled to China in July and later told that he could not leave; Chan can still move freely around mainland China and continue working, as he holds a Hong Kong passport and is currently assisting with a years-old investigation for Kroll.
Kroll is one of a number of foreign companies Beijing has cracked down on in recent months; Chinese authorities raided New York-based due-diligence firm Mintz Group in March, and arrested all five employees working in the company’s Beijing office, according to the WSJ. One of the company’s employees had been banned from leaving the country months prior to the raid, and authorities later imposed a $1.5 million fine on Mintz for allegedly conducting unapproved business.
Authorities made an unexpected visit to U.S.-based consulting firm Bain & Company’s Shanghai office and interrogated staff, and took away cellphones and computers, according to the WSJ. Chinese state media reported that Capvision, a massive Chinese-based consulting firm that does business with foreign clients, was under investigation by authorities and had been raided by police in several of the company’s offices.
In many of these cases, the companies and staff are not given reasons for what they are being investigated for, according to the WSJ.
China’s severe measures against foreign companies operating in its territory has eroded American confidence in doing business in China, which is at ground-zero levels for the first time in decades, according to the WSJ. The U.S. State Department has warned against traveling to China over such concerns and potential exit bans.
China’s Foreign Ministry did not immediately respond to a request for comment.
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