Update | JP Morgan Chase faces US probe for hiring Chinese princelings

JP Morgan Chase was caught in the spotlight yesterday after media reports suggested the bank hired sons and daughters of senior Chinese officials in the hope of winning deals from major state-owned enterprises.

The revelation of JP Morgan's hiring of the son of China Everbright Group's chairman and a former railway official's daughter comes at a sensitive time for Sino-US relations.

News of the investigation came ahead of state-owned China Everbright Bank's plan late this year to raise several billion US dollars in a Hong Kong listing. A dozen US and European investment banks, including JP Morgan, were competing for roles to underwrite Everbright Bank's IPO. China Everbright Group chairman Tang Shuangning is also the chairman of its subsidiary China Everbright Bank.

reported on its website yesterday, citing a confidential US government document, that the US administration had opened an antibribery-related investigation into JP Morgan. Specifically, it was probing the bank's hiring of the son of Tang, who is a former top banking regulator before he became China Everbright Group chairman. The investigation would also look into the bank's hiring of the daughter of Zhang Shuguang , former deputy chief engineer of China's railways ministry, for the bank's Hong Kong office.

A JP Morgan spokeswoman told the that the bank had already disclosed relevant matters in a regulatory filing on August 7. In the filing, the bank said it received "a request from the [US] SEC [Securities and Exchange Commission] Division of Enforcement seeking information and documents relating to, among other matters, the firm's employment of certain former employees in Hong Kong and its business relationships with certain clients." No names were mentioned in JP Morgan's August 7 filing.

"We are fully co-operating with regulators," the spokeswoman added without elaborating further.