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Suzanne Harrison

Dissent, rumblings of a mass exodus, the end of an era. That is how some present and former employees of the former Jardine Fleming have described its three-way merger with Chase Manhattan and JP Morgan.

Chase says the complaints are unfounded. Mergers of this scale are never without upheavals.

Chase also believes investment bankers with the former JF should be pleased, after an internal memo last Friday informed them more than half the senior appointments in investment banking (an area in which there is overlap with JP Morgan) will go to JF employees rather than Chase Manhattan or JP Morgan staff.

According to one source, the memo has taken away lingering doubts about key positions. Indeed, staff issues now seem to be on the back-burner, despite ongoing redundancies.

'The memo clarified something that was previously causing concern,' the source said.

But some believe this may not be enough to stop further senior departures.

By the end of January, senior investment bankers in the former JF could all be gone, according to one source.

In fact, their curriculum vitae are already out there, particularly as further staff cuts could occur after the JP Morgan merger, set for March but possibly earlier, another source said.

The defections underline the difficulties of melding a medium-sized Asian-based bank with British roots and two United States powerhouses with contrasting structures and values.

In fact, disappointment at the changing culture rather than anger over restructuring or threatened job losses is the cause of the departures, according to those who are still there or have recently left.

Chase, the third-biggest banking holding company in the US, took over British investment bank Robert Fleming - primarily for its JF arm -  in August and just a month later announced a US$34.5 billion tie-up with fellow US group JP Morgan.

Of the three, the former JF had the strongest equities business in Asia. JP Morgan has a strong corporate finance and investment banking business.

Casualties are inevitable in a fusion of such similar businesses, and staff have departed for various reasons.

On September 25, JF's 10-man corporate finance team in Tokyo quit en masse to join the local office of rival investment bank ING Barings.

Individuals have also left, often amicably, saying their decision was unrelated to the merger. They include Tim Freshwater, JF's chairman at the time the merger was announced, who is moving to Goldman Sachs' investment banking division.

Simon Heale, chief operating officer for JF based in Hong Kong, was made redundant this week, although sources said the move was the inevitable result of a change in management structure.

His redundancy has not been a bone of contention among the JF team, sources said. Chase reportedly was upfront with Mr Heale from the start. Mr Heale, with JF for only three years, is set to return to London.

It is culture rather than competition for key positions that is at the centre of discontent. JP Morgan and Chase had a different culture from JF and the clash is too strong for some, sources say.

The change could mean a shift to a US-style structure. There is talk the regional offices will be centralised, although a Chase spokesman has denied it.

According to one former investment banker with JF, as soon as January's bonuses have been paid, a mass exodus is expected to begin in the investment banking division.

'I think there will almost be nothing left,' he said.

'They [Chase] will remove all the joint ventures and instigate a completely different country structure.

'It will move away from having local execution in most countries and have coverage with a pool of international guys based in Hong Kong or Singapore.

'It will instigate a different human resources framework, which will mean that JF's uniqueness will disappear and that's what upsets people. They've got their own template.'

But while some are lamenting the old-style JF, others are more pragmatic. Certainly, they say, Robert Fleming would not have survived on its own without Chase.

'I believe it is part of the industry trend,' one senior staffer said. 'And you can't be nostalgic about it . . . it's a tough old world and I would say Chase has been very straightforward.'

Paul Beckwith, vice-chairman and head of investment banking at Chase Asia-Pacific, denied Chase was downsizing the country offices.

'The facts are quite the contrary,' Mr Beckwith said. 'I do not believe there will be many JF employee departures.

'The great aspects of JF culture were its distinct local-market expertise in every country in Asia. The negative aspect was its inability to fight for the biggest business and we have preserved the former and fixed the latter.

'We've retained the regional offices and built on them. Chase-JF and JP Morgan are advising on more merger and acquisition deals than any other firm in Asia.'

As far as senior positions go, a Chase spokesman said new appointments reflected the strengths of each company as it moved towards becoming one group. 'In equities, JF is very strong and they're going to take a very strong position [within the merged group],' she said.

'The hallmark of our integration process is to treat people fairly.'

According to an internal statement, Cezar Consing (JP Morgan) and Paul Beckwith (Chase) will manage investment banking in Asia-Pacific (excluding Japan) as a partnership, jointly handling all strategic and management issues.

Chase's Richard Kelly will head mergers and acquisitions, described as one of the group's core investment banking activities.

International equities will be run in the region by JF's Christopher Rampton, with JF's John Baldwin heading Japan. David Garrard of Ord Minnett, which was bought out by Chase not long after the JF deal was finalised, will head Australasia, while JF's Roy Laidlaw will be responsible for the rest of Asia-Pacific. Chase executive Antony Leung will be the merged firm's head in the Asia-Pacific region (excluding Japan).



JF fallout hounds Chase