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Chenyue Mao was prevented from leaving China in recent

weeks

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Foreign ministry says Mao is required to cooperate in an

investigation

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No details released on case or Mao's alleged involvement

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Mao is a managing director with Wells Fargo ( WFC )

By Liz Lee, Lananh Nguyen and Nupur Anand

BEIJING/NEW YORK, July 21 (Reuters) - China's Foreign

Ministry said on Monday that Chenyue Mao, the Wells Fargo ( WFC )

banker who has been blocked from leaving the country,

was involved in a criminal case and obliged to cooperate with

the investigation.

Mao is the latest of several executives from foreign

corporations to be stopped as they tried to depart China. Her

exit ban comes at a tense moment in U.S.-China relations as the

two countries wrangle over trade policies.

Chinese law enforcement authorities have restricted Mao's

exit in accordance with the law, Guo Jiakun, a spokesperson for

the ministry, told a regular press briefing.

Wells Fargo ( WFC ) declined to comment. On Friday, the bank said it

was "working through the appropriate channels" to secure Mao's

return to the United States as soon as possible.

The U.S. bank suspended all travel to China after Mao's exit

ban, a person familiar with the matter told Reuters last week,

saying she was a U.S. citizen. It is not known exactly when the

ban was imposed.

The case was being investigated and Mao was obliged to

cooperate with the investigation, Guo said, without elaborating.

"Everyone in China, whether they are Chinese or foreigners,

must abide by Chinese laws," Guo said, adding that China will

protect their legitimate rights and interests in investigations.

Beijing has used exit bans on both Chinese and foreign

nationals, often in connection with civil disputes, regulatory

investigations, or criminal investigations. Reuters could not

determine whether Mao had surrendered her Chinese citizenship.

The exit ban marks a stark contrast from three weeks ago,

when Mao stood on stage in Rio de Janeiro flanked by industry

executives. She had just been elected chair of FCI, a group that

facilitates international trade through factoring, a process in

cross-border transactions that involves financing, invoicing,

and payments.

"I am excited for what lies ahead ... together we will go

far," Mao posted on LinkedIn. She later traveled to China, where

she was born, and was blocked by authorities from returning to

Alpharetta, Georgia.

The Shanghai-born managing director and Wells Fargo ( WFC ) are

awaiting more information, according to two sources familiar

with the situation who declined to be identified given the

sensitivity of the matter.

The bank is seeking more information through various

channels, but is trying to keep a low profile to avoid

escalating the situation, according to the sources.

Mao's exit ban comes as diplomatic and business ties between the

U.S. and China remain strained. Experts said it could halt

corporate travel to mainland China, especially by Chinese-born

people holding foreign passports.

Mao has been a banker at Wells Fargo ( WFC ) for over a decade, and

works in its international factoring business, according to her

LinkedIn profile.

Factoring is a financing method in which companies sell

their receivables to third parties, such as banks, in exchange

for immediate cash, and advises multinational clients on

cross-border working-capital strategies.

FCI has 48 members in China that account for nearly 13% of

its membership, according to the group's website. In total, it

has nearly 400 member companies in more than 90 countries.

FCI did not respond to requests for comment.

At Mao's house, about an hour north of Atlanta, no one

appeared to be home on Friday evening. Neighbors declined to

comment to Reuters.

The home is in the Nesbit Lakes neighborhood, which

shoulders narrow, winding roads. The upscale houses have

manicured lawns and large oak trees that surround a small lake

near the Chattahoochee River in Atlanta's northern suburb.

The area's median home price is just over $1.17 million.

EXIT BANS

Wells Fargo's ( WFC ) China business is much smaller than its Wall

Street peers, with branches in Beijing and Shanghai.

Several foreign executives have been caught up in probes by

authorities that have chilled business sentiment in China.

Two sources who have helped to resolve exit bans in the past

said they are often issued by local Chinese governments. Such

bans can be used to address a range of issues, from business

disputes to family conflicts, allegations of illegal conduct or

personal altercations, said the sources, who had no specific

knowledge of Mao's case. The two sources declined to be

identified because of the sensitivity of the matter.

Factoring typically involves companies sending international

invoices internally, and can be complex and sometimes subject to

mishandling amid capital controls, the two sources said.

U.S. Secretary of State Marco Rubio said this month there was a

high probability of a meeting between the U.S. and Chinese

leaders, Donald Trump and Xi Jinping, but that no date has been

discussed.

While the use of exit bans, including on foreign nationals,

is rising, "too often companies and countries prefer to remain

silent in the hopes of improving or accelerating the process,"

said Laura Harth, China in the World director of human rights at

Safeguard Defenders, a non-profit organization.

"The signal it should send is that no one is safe when

traveling to China," she added.