A senior investment banker in Asia who previously worked at JPMorgan Chase has been acquitted of corruption charges related to the bank’s hiring of well-connected Chinese “princelings” to gain business in the country.
A Hong Kong court on Monday declared Catherine Leung, former vice president of Asian investments at JPMorgan, not guilty.
Ms Leung was accused in 2019 by the Territory’s Independent Commission Against Corruption of bribing the chairman of a logistics company nine years earlier. The ICAC alleged that it offered the man’s son a job at JPMorgan’s Hong Kong office in order to help the US bank secure work on the company’s initial public offering.
Ms. Leung, 52, left JPMorgan in 2015. She had been accused of offering an advantage to an agent on two occasions. She declined to comment after the verdict. JPMorgan also declined to comment.
As part of its “sons and daughters program,” JPMorgan sought to hire the children of some of China’s elite businessmen and government officials, often referred to as “princelings”.
The strategy was designed to help banks secure lucrative deals in China, but was also in potential violation of the U.S. Overseas Corrupt Practices Act, which prohibits companies from paying bribes to foreign officials to gain business. In 2016, JPMorgan agreed to pay $ 264 million to settle an investigation into the matter by the US Department of Justice.
On Monday, Deputy District Court Judge Emily Cheung said JPMorgan’s legal and compliance department and the junior recruiting team had “clearly made mistakes.” She called the hiring of Ang Ren-yi, the son of Ang Keng-lam, president of Kerry Logistics, “a total mess”.
The judge added that the court could not be certain that Ms Leung’s intention was to gain an advantage in the IPO mandate, even though she might have intended to build and maintain good relations with the companies of the Kerry group. The judge also found that Ms. Leung was not the person who could make the final decision regarding the hiring.
Other global investment banks – Goldman Sachs, Deutsche Bank, Citigroup, Credit Suisse and Morgan Stanley – have also been approached by regulators in connection with hiring relatives of powerful executives to win business. In 2018, Credit Suisse agreed to pay around $ 77 million to settle an American investigation into his hiring of princelings. A year later, Deutsche Bank paid a fine of $ 16 million to US authorities.
JPMorgan has employed the relatives of several prominent personalities. They included Gao Jue, the son of a Chinese Minister of Commerce, who was later employed by Goldman Sachs. JPMorgan also hired Tang Xiaoning, the son of a former banking regulator, who went on to chair Everbright Group, one of China’s largest financial conglomerates.
Other Western investment banks have also hired the children of some of China’s most powerful politicians. Credit Suisse once counted Wen Ruchun, the daughter of former Chinese Premier Wen Jiabao, among its employees, the Financial Times reported in 2013. Ms. Wen, also known as Lily, previously worked for Lehman Brothers.