A former managing director of J.P. Morgan Securities, Asia Pacific, has been charged for allegedly employing the son of a potential client.
Catherine Leung Kar-cheung, the former managing director of J.P. Morgan Securities (Asia Pacific), faces bribery charges for allegedly hiring the son of a former chairman of Kerry Logistics Network in exchange work on the company’s IPO.
The Independent Commission Against Corruption (ICAC) of Hong Kong on Monday pressed two charges against Leung, 51, for bribing Ang Keng-lam, the then chairman of Kerry Logistics, by employing his son Ang Ren-yi, principal magistrate Peter Law Tak-Chuen heard. Although the prosecutor did not mention the job or title, «Bloomberg» data revealed that Ang Ren-yi was employed as an analyst at the bank covering energy and natural resources.
Unprecedented Charges
This was the first time that ICAC had pressed charges relating to hiring in exchange for favors leading to investment banking deals. The case relates to J.P. Morgan's controversial hiring strategy in 2013, whereby the bank's Asia unit created an elaborate program called «Sons and Daughters» which allowed clients and influential government officials to recommend potential hires.
According to a U.S. Securities and Exchange Commission (SEC) statement in 2016, J.P. Morgan Chase hired about 200 interns and full-time employees at the request of its Asia-Pacific clients or government officials, over a seven-year period between 2006 to 2013. Eventually, the U.S. bank settled the allegations by the SEC and other authorities in 2016 for $264 million.
Bank Did Not Win IPO Deal
According to Hong Kong stock exchange data, J.P. Morgan did not land the initial public offering (IPO) deal. Instead, BOCI (Asia), Morgan Stanley, HSBC, and Citigroup were the IPO sponsors. Kerry Logistics, a spin-off of Kerry Properties, raised some $280 million via its IPO in December 2013.
Leung, who is out on HK$20,000 bail, left the court without speaking to the media. As for Ang Keng-lam, he «is no longer employed by Kerry Logistics Network in any capacity. It is not the company’s policy to comment on the affairs of private individuals,» reported «South China Morning Post» quoting a spokesman from Kerry Logistics.
Jason Tsang Wa-chan, a senior investigator at ICAC representing the prosecution side, requested that the case be transferred to the District Court and sought an adjournment till June 28.
