Capvision moves to address China's national security concerns

Consulting firm Capvision Partners on Wednesday said it has set up a compliance committee to "actively implement rectification requirements" demanded by Chinese authorities following what it said were failures in its national security responsibilities.

Chinese authorities have launched a sweeping crackdown on consultancy firms aimed at stopping the theft of state secrets, including technology and defence, state media has reported.

Police raided Capvision offices over what media reported were national security issues, in a warning to other advisory firms.

"We are deeply aware that we failed to fully fulfill our national security responsibilities in our past business activities, and there are major hidden dangers and loopholes, which have caused serious harm to national security," Capvision said in the statement.

The compliance committee, composed of three officials from the company, will be chaired by CEO Xu Rujie, Capvision said.

Following the investigation, CICC Capital, a unit of leading Chinese investment bank CICC, has stopped using Capvision's services, Reuters reported citing three sources.

"As a leading enterprise in the business consulting industry, our company was punished and required to rectify by the national security authorities, which is not only a painful lesson for our company, but also a wake-up call for the standardised development of the business consulting industry," Capvision added.

Shanghai-based Capvision is the latest consultancy and due diligence firm to get caught in Beijing's crackdown aimed at protecting national security.