Investigation Reveals J.P. Morgan’s Hiring Practices
A two-year investigation of J.P. Morgan’s hiring practices found that the bank hired friends or family members of Chinese government officials at 75% of Chinese companies that it took public in Hong Kong. The ongoing investigation is looking into the so-called “Sons and Daughters” program at J.P. Morgan, whereby the bank allegedly hired offspring of top officials in order to secure business deals. Earlier media investigations linked J.P. Morgan to Wen Jiabao’s daughter and the Minister of Commerce, among others. Ned Levin reports for the Wall Street Journal:
The bank was hired to work on 12 Chinese initial public offerings of $1 billion or more in Hong Kong over the period that was examined, according to an analysis of Dealogic data. The J.P. Morgan document shows the bank hired candidates referred by officials at nine of those companies or their corporate parents.
Those big deals included state lender Agricultural Bank of China Ltd.’s $22 billion IPO in 2010, construction-and-engineering conglomerate China Railway Group Ltd.’s $5.9 billion IPO in 2007 and nuclear-plant operator CGN Power Co. Ltd.’s $3.6 billion IPO in 2014.
The companies, all of which are state-owned, didn’t respond to requests for comment.
U.S. authorities have been investigating the program for the past two years to determine whether the bank’s hires might have constituted bribery under the U.S. Foreign Corrupt Practices Act, according to bank filings, internal documents and people familiar with the matter. The FCPA makes it illegal for companies or their agents to give anything of value to foreign officials, including employees of state-owned companies, with the intention of improperly influencing them. [Source]
Read more about J.P. Morgan in China, via CDT.