Mon, Mar 31, 2014 - Page 14 News List

Hong Kong watchdog said to search JPMorgan office

Bloomberg

Hong Kong’s anti-corruption agency reportedly searched a JPMorgan Chase & Co office in the territory on Wednesday last week amid a US investigation into the bank’s hiring practices, according to two people with knowledge of the matter.

The Independent Commission Against Corruption (ICAC) reportedly seized computer records and documents after searching the office of Fang Fang (方方), the company’s outgoing chief executive officer for China investment banking, said the sources, who asked not to be identified because the investigation is confidential.

“We will not comment on individual cases,” ICAC spokesman Alan Tse said by telephone on Saturday.

JPMorgan Hong Kong spokeswoman Marie Cheung declined to comment on the ICAC search.

The New York-based bank announced Fang’s resignation on Monday last week. His departure comes amid an investigation into JPMorgan’s Asian hiring practices. US authorities are examining whether the bank employed people in Asia so that their relatives in government would steer business to the bank, people with knowledge of the probes have said.

The banker joined JPMorgan in August 2001 and became head of the firm’s China investment-banking unit in 2007. Fang was made vice chairman for Asia investment banking in 2009. Prior to joining the bank, Fang worked as a vice president of Beijing Enterprises Holdings Ltd (北京控股), an investment company controlled by the Beijing government.

JPMorgan, the world’s biggest investment bank by fees last year, said in August last year that the US’ Securities and Exchange Commission (SEC) had sought information on its employment practices and client relationships in Hong Kong.

US prosecutors were given e-mails written by Fang in which the banker supported the hiring of China Everbright Group (中國光大集團) chairman Tang Shuangning’s (唐雙寧) son, the Wall Street Journal reported on Monday last week. Those e-mails also highlighted the potential for doing business with China’s state-backed conglomerate.

Fang has not been accused of any wrongdoing, the paper said.

The probes have posed hurdles to JPMorgan’s involvement in at least two recent investment-banking transactions. The bank decided to quit China Everbright Bank Co’s (光大銀行) Hong Kong share sale in November last year, because the investigation delayed an internal approval process, according to two people with knowledge of the matter. The US$3 billion deal was the largest first-time offering by any company in Hong Kong last year.

In January, JPMorgan bowed out of Tianhe Chemicals Group’s (天合化工) IPO, as questions arose over the firm’s previous employment of the daughter of Tianhe’s chairman, according to two people with knowledge of the matter. She left the bank in August last year, one of the people said.

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