JPMorgan pulls out of China Everbright Bank's Hong Kong share sale
Exit follows move by US authorities to look into reports the bank hired party leaders' offspring
JPMorgan Chase has pulled out of a syndicate of banks working on China Everbright Bank's US$2 billion share sale in Hong Kong, two people familiar with the matter said.
The United States bank's abrupt withdrawal from the syndicate is a rare event. The Beijing-based lender is expected to decide today whether to proceed with the bookbuilding process to complete its long-awaited H-share listing this year.
The US authorities are looking into allegations that JPMorgan hired the offspring of Communist Party and business leaders on the mainland in order to win new business and contracts.
Coincidentally, the New York-based bank at one point hired Tang Xiaoning, the son of China Everbright Group chairman Tang Shuangning, who has been at the helm of the financial group since 2007. The senior Tang was a vice-chairman of the mainland's banking regulator before his appointment to Everbright Group, a state-controlled financial conglomerate.
It is very unusual … for one of the key joint bookrunners to exit
The US authorities also have questions about JPMorgan's hiring of Zhang Xixi, the Stanford-educated daughter of one of the mainland's most powerful railway officials, Zhang Shuguang.
