Corporate China | New probes at JPMorgan, China Mobile

In an interesting twist, neither of the two latest probes against JPMorgan and China Mobile is coming from the National Development and Reform Commission (NDRC) or the State Administration For Industry and Commerce (SAIC), which have spearheaded most of the earlier probes. Both the NDRC and SAIC are powerful central government bodies charged with maintaining fair competition and order in China's various business sectors. This broadening of investigative bodies probably reflect the fact that Beijing is officially encouraging these kinds of probes, meaning we could see many more by a wide range of regulatory and other agencies in the months ahead.

In one instance, JPMorgan reportedly hired the son of a former Chinese regulator who is now chairman of Everbright Group, a major financial conglomerate based in Shanghai. After the son joined JPMorgan, the US bank went on to win a number of major assignments from Everbright, including one to advise on an IPO for one of its units, according to the report. As I've said above, this kind of hiring shouldn't surprise anyone, and isn't really even limited to China.

It's quite common for western companies to hire friends and relatives of their major business contacts as personal favors, and is part of the broader business culture. For that reason, I doubt this US probe will result in any criminal investigation. But the big danger could come if China decides to open its own investigation into the matter, which looks like a strong possibility in the current climate where a large number of foreign firms are being investigated for everything from price fixing to bribery.