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US probe into JPMorgan hiring baffles executives

US investigation into bank hiring children of senior Chinese officials baffles executives

PUBLISHED : Tuesday, 20 August, 2013, 12:00am
UPDATED : Tuesday, 20 August, 2013, 5:42am

The investigation launched by US regulators into JPMorgan's hiring of well-connected Chinese staff in Hong Kong could be politically motivated, say analysts struggling to understand the timing and aims of the probe.

The US Securities and Exchange Commission's (SEC)decision to investigate whether the bank hired children of senior Chinese officials in Hong Kong to help it win business is baffling to many executives in a variety of industries given the long-standing global practice of hiring former top officials or civil servants into executive positions to leverage their connections.

"It is hard to imagine that US companies will stop hiring people with connections in China, the US or any other jurisdiction. Rather, there will be a screening process [by companies] to moderate their regulatory risk," Gene Buttrill, a partner at US law firm Jones Day, told the South China Morning Post.

"The SEC is under pressure from politicians and the public to demonstrate it is doing whatever it can to combat Chinese corporates and the Chinese government abusing US markets.

"We can see a trend of increasingly poor relations between China and US regulators. China increasingly is seen as a problem rather than an opportunity by US politicians and the US business elite. There has been a palpable change in sentiment since 2010," Buttrill said.

China has launched a slew of its own investigations in recent weeks to examine everything from price fixing to corruption in a number of industries

Earlier this month, Mead Johnson Nutrition, a US children's food company, was fined 203.8 million yuan (HK$256.2 million) by Chinese authorities for monopoly behaviour, while Danone of France and other food companies were also fined.

Critics believe the move is designed to scare off overseas firms and protect Chinese companies in the industries in which they find it hardest to compete with foreign intellectual property, quality and safety standards.

That makes some commentators believe that the SEC's investigation may be designed to embarrass Beijing by highlighting just how many well-connected people were involved in one major transaction.

JPMorgan declined to comment on the issue.

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HiggsSinglet
"Chinese corporates and the Chinese government abusing US markets". What a joke, I see more US companies abuse others more so than the other way round. And this is a world wide thing. Most US companies doing business overseas cannot be trusted!!
chaz_hen
Makes sense. T_it for tat. Kind of like China banning Norwegian salmon after Liu Xiaobo won the Nobel Peace Prize. Childish games amongst all of them.
(Can you believe SCMP won't even allow one to use t_it in the manner I did here?)
 
 
 
 
 

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