JPMorgan Chase

Chinese web users cynical over JP Morgan bribery probe

PUBLISHED : Monday, 19 August, 2013, 2:32pm
UPDATED : Tuesday, 20 August, 2013, 1:05am

Chinese web users expressed cynicism on Monday about a reported US investigation into banking giant JP Morgan Chase over its hiring of influential officials’ children, with some calling the practice widespread and an “open secret”.

The US Securities and Exchange Commission (SEC) is mounting a bribery probe into JP Morgan for allegedly employing officials’ relatives to help secure lucrative contracts in China, the New York Times reported at the weekend.

The children include the son of former Chinese banking regulator Tang Shangning, who is now chairman of the state-run financial conglomerate China Everbright Group.

The American investment banking giant secured a succession of sought-after deals from China Everbright after hiring him, the newspaper said, citing a confidential US government document.

Another case involved the daughter of a Chinese railway official who was later arrested in connection with a bribery scandal, it said, adding that the China Railway Group selected JP Morgan to advise it on becoming a public company.

The report triggered widespread vitriol on China’s Twitter-like weibo social networks, 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 US 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”.

The Times said the government document did not show a clear link between JP Morgan’s hiring policy and its ability to secure business, nor did the records suggest that the hired employees were unqualified, or that they necessarily helped it secure business.

The bank has not been accused of any wrongdoing, the paper added.