In the wake of Chinese authorities raiding U.S. consultancy Mintz Group's Beijing office in March, multiple employees of the firm have departed Hong Kong, according to informed sources. Amid tightening anti-espionage legislation and intensified scrutiny of foreign businesses in China, the events have provoked unease in the corporate sector.

Companies are increasingly uncertain of their footing as Beijing is set to enact stricter anti-espionage laws in July, following investigations into Mintz Group and other international consulting firms like Bain & Co and Capvision Partners. The prompt relocation of Mintz personnel from Hong Kong reflects the growing apprehension within the global financial hub, still adjusting to Beijing's 2020-imposed national security law.

According to the sources, about half a dozen employees, including investigators and the Hong Kong office head, relocated in the past few months to ensure their safety during the uncertain Chinese police probe. The move is reportedly a temporary solution.

Mintz Group, known for its corporate due diligence work, had been investigating potential use of forced labor in supply chains connected to China's Xinjiang region. While it remains unclear if this work initiated the Chinese investigation, other executives of international due diligence firms operating in China reported warnings from authorities against such investigations.

Several Hong Kong-based Mintz employees have relocated to Singapore, with no plans for return until the Chinese probe concludes, one source disclosed. Although Mintz continues to pay rent on its vacant Hong Kong office, employees have been noticeably absent for months.

Mintz Group confirmed the March raid on its Beijing office and subsequently shut down its operations there. They expressed willingness to cooperate with Chinese authorities to clarify any misunderstandings.

The fallout of this investigation has unsettled the professional advisory service industry in China, extending to Hong Kong. The city, a global financial center, is home to a significant professional services talent pool, including corporate investigation firms like Kroll, Control Risks, McKinsey, and FTI.

The U.S. has revised its risk assessment for U.S. citizens in Hong Kong, citing the increased likelihood of arrest, detention, expulsion, or prosecution following the national security law's enactment. In contrast, Chinese and Hong Kong authorities insist that human rights are respected and all nations require such laws.

China's increasingly stringent legal environment, featuring laws on cybersecurity, personal information protection, and data security, complicates compliance, posing challenges to due diligence executives. As one executive remarked, "They would tell us exactly what areas are off-limits," citing Xinjiang as an example.

Mintz Group's Asia head, Randal Phillips, previously co-authored an article on "sanctions due diligence" under the U.S. Uyghur Forced Labour Prevention Act concerning Xinjiang, which has since been removed from the company's website.