JPMorgan hiring in China under U.S. scrutiny - report

Sat Aug 17, 2013 10:54pm EDT

Aug 17 (Reuters) - U.S. 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 U.S. 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 quarterly filing this month to the inquiry by the U.S. Securities and Exchange Commission's anti-bribery unit.

Spokesmen for the bank and for the SEC could not be reached immediately by Reuters for comment.

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."

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.

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Comments (1)
pyoa wrote:
When doing business in China, this is the way it’s is done. You either take it or leave it.

Aug 18, 2013 1:41am EDT  --  Report as abuse
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