Photo: Reuters. Photo: Reuters.
SHANGHAI: Foreign investment banks in China were taken by surprise by a US bribery probe into JPMorgan’s hiring of Chinese “princelings”, in part because the practice is so widespread.
The anti-bribery unit of the Securities and Exchange Commission is reportedly investigating claims the company hired two children of powerful Chinese officials to help win investment banking business.
Now industry insiders say other firms will be reassessing the practice of recruiting “princelings”, as rich young Chinese with powerful family connections are known.
JPMorgan said it was “fully co-operating” with regulators.
The issue is that there may be a blurred line between recruiting the best person for the job, choosing the candidate with the best connections, and picking someone as a trade-off to win business through the back door.
Andy Xie, formerly Asia economist for Morgan Stanley, said, “So many people have power (in China). You hire this person’s son. It ends up like a Chinese game.”
In the JPMorgan case, authorities are looking at the recruitment of the son of Tang Shuangning, a former banking regulator who is now chairman of the state-run financial conglomerate China Everbright Group, the New York Times said. – Sapa-AFP