* JPMorgan steps aside from second China IPO
* UBS mandated to work on chemicals firm's IPO
* Morgan Stanley's Asia private equity unit invested $300
mln in 2012
By Fiona Lau and Lawrence White
HONG KONG, Jan 21 (IFR/Reuters) - JPMorgan Chase & Co
has stopped working on a Chinese firm's initial public offering
amid an investigation by U.S. authorities into its hiring
practises in China, people with direct knowledge of the matter
told Reuters on Tuesday.
It is the second time JPMorgan has stepped aside from a
Chinese IPO candidate while U.S. securities regulators look into
whether the bank violated federal laws in hiring the relatives
of current or potential clients with the sole purpose of winning
business from them.
JPMorgan has ended its IPO discussions with Tianhe
Chemicals, the people said, as the supplier of lubricating oil
additives to refiners such as China Petroleum and
PetroChina was trying to move ahead with an around
$1 billion deal. Thomson Reuters publication IFR said on Monday
that Tianhe Chemicals hoped to launch the IPO in the second
quarter of this year.
JPMorgan's exit was driven by concerns raised about the
bank's employment of Joyce Wei, the daughter of Tianhe Chemicals
Chairman Qi Wei, IFR reported, citing sources.
Hong Kong securities license filings show that a Jiao Wei
worked at JPMorgan from January 2012 to August 2013, and is now
on the staff at UBS, joining the Swiss bank in
October. Jiao is Joyce Wei's Chinese name, a person familiar
with the matter told IFR, affirming also that she is Wei's
daughter. Another source said UBS is mandated to work on the
Tianhe Chemicals IPO.
JPMorgan and UBS declined to comment. Efforts to reach Joyce
Wei and Tianhe Chemicals were not successful.
JPMorgan had been discussing an overseas listing with
privately-owned Tianhe since at least 2011, when IFR first
reported the company planned to list in London. It is not clear
whether Tianhe signed any formal letter of engagement before or
after Wei joined JPMorgan. One source said on Tuesday the
company - in which Morgan Stanley's Asia private equity
unit invested $300 million for a minority stake in 2012 -
planned to list in Hong Kong.
The U.S. Securities and Exchange Commission (SEC) and the
Department of Justice are investigating whether JPMorgan
violated bribery laws by improperly hiring the relatives of
well-connected Chinese officials. The investigation is ongoing
and the bank has not been accused of any wrongdoing related to
JPMorgan earlier withdrew from a syndicate of underwriters
working on a $3 billion listing by China Everbright Bank Co,
Reuters reported in November.