JPMorgan hiring in China under US scrutiny
New York, August 18, 2013
US authorities have opened an investigation into whether JPMorgan Chase & Co hired the children of powerful Chinese officials to help it win business in China, the New York Times said on Saturday.
A report posted in the Times' online edition cited a confidential US government document as its source for the story.
The Times said the bank hired Tang Xiaoning, the son of Tang Shuangning, a former Chinese banking regulator who is now the chairman of the China Everbright Group, a state-controlled financial conglomerate.
After the son joined JPMorgan, the bank secured several important assignments from the Chinese conglomerate, including advising a subsidiary of the company on a stock offering.
The Hong Kong office of JPMorgan also hired Zhang Xixi, the daughter of a now-disgraced Chinese railway official, and went on to help advise his company, which builds railways for the Chinese government, on its plans to become a public company, the Times said.
JPMorgan, which has had numerous recent issues with federal agencies, referred in its 10-Q quarterly filing this month to the inquiry by the US Securities and Exchange Commission's anti-bribery unit.
"We publicly disclosed this matter in our 10-Q filing last week and are fully cooperating with regulators," said a Hong Kong-based spokeswoman for JPMorgan.
JPMorgan said in its filing that it had received "a request from the SEC Division of Enforcement seeking information and documents relating to, among other matters, the firm's employment of certain former employees in Hong Kong and its business relationships with certain clients."
A spokesmen for the SEC could not be reached immediately by Reuters for comment. Zhang and Tang both have left JPMorgan, the newspaper said.
The report stressed that the government document did not definitively link JPMorgan's hiring practices to its ability to win business.
It also said there had been no suggestion that the employees hired by the bank were unqualified and said JPMorgan, although under investigation, had not been accused of any wrongdoing. - Reuters