A top executive at the Chinese arm of JPMorgan Chase & Co. (NYSE:JPM) is expected to resign while a probe continues into the bank’s hiring practices in Asia, the Wall Street Journal reported Sunday, citing sources.
Fang Fang, CEO of New York-based JPMorgan's investment-banking arm in China, and the vice chairman of its investment-banking operations in Asia, has been associated with the company for almost a decade, and the bank is expected to make an internal announcement as early as Monday about Fang’s retirement, the Journal reported.
Fang, who reportedly told the bank he wanted to retire, has come under scrutiny from U.S. investigators examining whether the company or its employees violated the Foreign Corrupt Practices Act, which prohibits American companies from giving money or other valuable items to foreign officials in return for business.
The investigators are also looking into JPMorgan's hiring practices after it hired the son of China Everbright Group Chairman Tang Shuangning, and to examine whether the hire won the bank any assignments from the Everbright group. Fang, Tang and his son have so far not been accused of any wrongdoing, but the American bank has provided investigators with Fang's emails discussing the hiring of Tang’s son.
Fang began working as an investment banker with Merrill Lynch & Co. in 1993 in New York, at a time when the bank had won high-profile deals from the Chinese government. He also reportedly helped Chinese companies to get listed in Hong Kong, including a conglomerate controlled by the Beijing municipal government, which owned a range of companies, including a brewery and a company handling gate receipts for the Great Wall of China and toll roads, and franchises of McDonald's Corporation (NYSE:MCD) in Beijing.
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He joined Beijing Enterprises Holdings (HKG:0392) as a director and remained there until 2004, before joining JPMorgan. In 2011, JPMorgan became an adviser to the Everbright group when the Chinese company unsuccessfully tried to raise up to $6 billion by getting listed in Hong Kong. JPMorgan was also an underwriter in 2013 when China Everbright again tried to list in the city but the initial public offer, or IPO, was unsuccessful because of deteriorating market conditions. Last November, JPMorgan withdrew from underwriting China Everbright's new $2 billion IPO in Hong Kong, the Journal reported citing sources.