JPMorgan Chase's Hiring Practices In Asia Probed
The Securities and Exchange Commission reportedly has opened a bribery investigation into whether JPMorgan Chase hired the children of powerful Chinese officials to help the bank win lucrative business. JPMorgan says it is fully cooperating with investigators.
RENEE MONTAGNE, HOST:
NPR's business news starts with family ties.
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MONTAGNE: U.S. regulators have launched an investigation into the giant bank, JPMorgan Chase, related to its hiring practices in China. The bank reportedly drummed up business with state-owned firms after hiring the children of the firm's executives. The regulators aren't accusing JPMorgan Chase of anything illegal yet.
NPR's Anthony Kuhn has the story from Beijing.
ANTHONY KUHN, BYLINE: JPMorgan second-quarter filing to the Securities and Exchange Commission mentions obliquely that the commission is seeking information on some of its hires in Hong Kong. The New York Times broke the story on Saturday.
In one case, JPMorgan Chase hired the son of the chairman of a Chinese state-owned financial conglomerate called the Everbright Group. Not long after, Everbright Bank hired JPMorgan to help list its stocks on the Hong Kong exchange. JPMorgan also helped with the listing of the China Railway Group after hiring one of its executive's daughters.
Both JPMorgan and Everbright say their business dealings are transparent and in line with Chinese and foreign regulations.
Giangin Ming(ph), a corruption expert at the Beijing University of Aeronautics and Astronautics, says he doubts that very much.
GIANGIN MING: (Foreign language spoken)
KUHN: I believe JPMorgan's public credibility is likely to be affected by this incident, he says. It's possible that there was some exchange of favors going on because this kind of behavior represents an obvious conflict of interest. Sure, Ming says, it's true in every country that officials' kids work in finance and that personnel connections are important in business. The problem, he says, is the Chinese regulation of this sort of interaction is weak and prone to abuse. He adds that the incident is likely to fuel public anger in China at the privileges of politician's offspring.
Anthony Kuhn, NPR News, Beijing. Transcript provided by NPR, Copyright NPR.View this story on npr.org