JPMorgan Chase in new scandal involving insurance regulator chief
Mainland insurance regulator chief reportedly asked CEO for a 'favour'
JPMorgan Chase is embroiled in another scandal involving top mainland officials and jobs for well-connected individuals.
China Insurance Regulatory Commission chairman Xiang Junbo had asked JPMorgan chief executive Jamie Dimon to do him a "favour" by hiring a young job applicant, a family friend of Xiang, who now worked at the bank, The New York Times reported yesterday, citing a confidential JPMorgan e-mail.
US authorities were investigating whether the hiring at JPMorgan was done explicitly to win business from mainland companies, the newspaper reported. At least six other Wall Street firms had also received requests for information related to their hiring, it said.
JPMorgan said Dimon had nothing to do with the decision to hire the young woman, described within the bank as well qualified, the report said.
President Xi Jinping began a campaign to combat corruption and other irregularities after he became Communist Party general secretary in autumn 2012, leading to a string of probes and arrests of senior mainland officials.
"Xi's campaign against corruption seems to have popular support," said Basil Hwang, a Hong Kong-based partner at Zhong Lun, a mainland law firm. "Personal relationships have always been important in business, but under the current regulatory environment, undoubtedly, officials are going to be especially careful not to do favours in return for personal advantage."
Dimon met the applicant in June 2012 during a meeting with Xiang at a time when JPMorgan was seeking work from mainland insurance companies, The New York Times reported. It added that Xiang introduced his young interpreter to Dimon as the meeting was wrapping up and portrayed her as the daughter of a close friend and a potential JPMorgan employee.
With the approval of the bank's compliance department, and after vetting the applicant with multiple interviews, JPMorgan created a special internship to accommodate the applicant, who later landed a full-time job at the bank, the newspaper reported, citing people briefed on the situation.
JP Morgan recently stopped work on the Hong Kong listing of Tianhe Chemicals after Joyce Wei, a daughter of the mainland firm's chairman, left the bank. Tianhe was the second IPO JPMorgan abruptly dropped, having withdrawn in November from China Everbright Bank's offering in Hong Kong.
The firm at one point hired the son of Tang Shuangning , the chairman of the bank's parent company, China Everbright Group.