Hong Kong Monetary Authority bans staff from making job referrals to regulated institutions after deputy pitched son’s resume to JP Morgan
JP Morgan’s hiring practices under scrutiny over US anti-bribery laws
The Hong Kong Monetary Authority has banned all staff members from referring job candidates to institutions it regulates after deputy chief executive Peter Pang was named alongside senior Chinese business leaders and mainland government ministers as having referred friends or relatives for jobs and internships at Wall Street bank JP Morgan where hiring practises are now under scrutiny by US regulators for a potential breach of American anti-bribery laws.
In 2006 Pang sent his son’s resume to JP Morgan after learning about their summer internship programme from a friend at the bank, an HKMA spokesperson said. His son was offered a place.
Pang has denied trying to influence the recruitment process.
In September, Hong Kong Exchanges & Clearing (HKEx) chief executive Charles Li Xiaojia brushed off allegations that as chairman of JP Morgan China, he had recommended the bank employ children and acquaintances of mainland officials.
Hong Kong’s banking regulator admitted that “the existing guideline does not have detailed requirements on such posts as summer interns or training posts” but that as Pang’s job “did not involve supervisory functions over or direct business dealings with JP Morgan, we do not see any major issue in this incident.”
As a result of what it called a “public perception issue” the HKMA “will inform our staff that with immediate effect all HKMA staff should not make any kind of job referral to the institutions regulated by the HKMA,” the spokesperson said. The regulator will also “clarify” declaration requirements for HKMA staff who have family working at regulated institutions.
Lawmaker James To Kun-sun said Pang as a senior executive would have had some responsibility for monitoring the bank, and he wanted to know whether Pang had used an official email or letterhead to send the resume. “I have some difficulty understanding why he sent the resume to the bank unless he wanted to use his position to influence the decision,” To said.
HKMA would not comment on whether there would be an internal investigation into Pang’s conduct.
JP Morgan spokesman Chris Cockerill declined to comment.
The HKMA is currently helping US authorities with its probe into JP Morgan’s ‘Sons and Daughters’ hiring programme, which ran between 2004 and 2013, and where according to a recent Wall Street Journal report the bank hired 222 candidates referred by a wide range of well connected Chinese business and political figures, including names put forward by executives at three-quarters of the major Chinese firms the bank took public in Hong Kong.
The Journal named officials at the China Banking Regulatory Commission and the Ministry of Public Security, as well as executives at Cosco Group and Aluminium Corporation of China for referring candidates to JP Morgan.
US regulators have been investigating the bank for the past two years to see if any of these hires was linked to a specific business agreement that might be considered bribery and a potential violation of the US Foreign Corrupt Practises Act.