U.S. Investigating JPMorgan’s Hiring Practices In China
WASHINGTON (AFP) – The United States is investigating JPMorgan over its hiring practices in China, the company confirmed Sunday.
The New York Times had earlier reported that the investment bank was under investigation over claims it hired the children of influential Chinese officials to secure business in the country.
“We publicly disclosed this matter in our 10-Q filing last week, and are fully cooperating with regulators,” company spokesman Mark Kornblau told AFP when asked about the report.
The U.S. Securities and Exchange Commission filing confirmed that there had been a request from regulators for “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.”
The filing did not provide further details.
The Times had cited one case where the bank hired the son of Tang Shuangning, a former Chinese banking regulator who is now chairman of the state-run China Everbright Group financial conglomerate.
JPMorgan secured a succession of sought-after deals from China Everbright after hiring the son, Tang Xiaoning, the paper said.
The Times report said the Hong Kong office of JPMorgan had also hired the daughter of a Chinese railway official who was later arrested in connection with a bribery scandal.
It said the daughter’s hiring came as The China Railway Group selected JPMorgan to advise it on becoming a public company.
China Railway later raised a staggering $5 billion when it went public in 2007.
The Times, however, said the government document did not show a clear link between JPMorgan’s hiring policy and its ability to secure business.
The records also did not suggest that the hired employees were unqualified, or that they necessarily helped JPMorgan secure business. The bank has not been accused of any wrongdoing.
The report triggered widespread vitriol on China’s Twitter-like weibo social networks on Monday, with some users speculating it was common practice in the country.
“I think there would be dramatic findings if investigations were carried out into every mid-level manager from mainland China” at other investment banks, wrote one observer.
Another user, MegCH, said JP Morgan was unfortunate to be singled out: “Isn’t this a regular trick of investment banks, state-owned companies and some government agencies? JP Morgan is just unlucky.”
Some others questioned why the investigation was being conducted by U.S. authorities.
“This is really ridiculous. Shouldn’t Chinese authorities launch probes into such matters?” asked one person whose pseudonym was a Chinese saying that means: “I try to be righteous although the general moral tone is low.”