Hong Kong’s anti-corruption agency searched a JPMorgan Chase & Co. office in the city March 26 amid a U.S. investigation into the bank’s hiring practices, according to two people with knowledge of the matter.
The Independent Commission Against Corruption seized computer records and documents after searching the office of Fang Fang, the company’s outgoing chief executive officer for China investment banking, said the people, who asked not to be identified because the investigation is confidential.
“We will not comment on individual cases,” Alan Tse, an ICAC spokesman, said by phone yesterday. Marie Cheung, a Hong Kong spokeswoman for JPMorgan, declined to comment on the ICAC search.
The New York-based bank announced Fang’s resignation March 24. His departure comes amid an investigation into JPMorgan (JPM)’s Asian hiring practices. U.S. 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 and 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., an investment company controlled by the Beijing government.
Fang quit the bank as he wants to spend more time with his family, a person with knowledge of the matter said earlier.
JPMorgan, the world’s biggest investment bank by fees last year, said in August that the U.S.’s Securities and Exchange Commission had sought information on its employment practices and client relationships in Hong Kong.
U.S. prosecutors were given e-mails written by Fang in which the banker supported the hiring of China Everbright Group Chairman Tang Shuangning’s son, the Wall Street Journal reported March 24. Those e-mails also highlighted the potential for doing business with China’s state-backed conglomerate while Fang hasn’t 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 Hong Kong share sale in November because the investigation delayed an internal approval process, according to two people with knowledge of the matter. The $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 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 of last year, one of the people said.
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