JP Morgan Chase to pay US$264 million to settle China bribe scandal

WASHINGTON: JP Morgan Chase has agreed to pay US$264 million to settle a foreign bribery case dubbed the ‘princelings case’ in which the bank gave prized jobs to friends and relatives of Chinese officials, said US officials.

The multinational bank, now the world’s largest by market capitalization, admitted to taking in more than US$100 million after hiring candidates referred by clients, including by senior Chinese officials in positions to steer business to the bank.

Despite the announcement, shares in the JP Morgan were trading higher Thursday afternoon, up 0.6 per cent shortly after 2000 GMT in New York.

“Awarding prestigious employment opportunities to unqualified individuals in order to inf luence government officials is corruption, plain and simple,” Leslie Caldwell, chief of the US Justice Department’s criminal division, said in a statement.

The case drew attention for its focus on the use of hiring as a form of bribery.

Over a seven-year period, between 2006 and 2013, JP Morgan Chase hired nearly 100 employees and interns referred by government officials at 20 different state-owned businesses in China, officials said.

Despite the large settlement, Bart Naylor of policy watchdog group Public Citizen, complained that the bank “has escaped true accountability”

“JPMorgan executives belong in jail, but instead shareholders will foot the bill for what one government official described as ‘systemic bribery,’” he said in a statement.

Officials at a regional subsidiary in Hong Kong created a client job referral programme sometimes known internally as the ‘Sons and Daughters Program’ to hire candidates of strategic value to the bank, according to the Justice Department.

By 2009, senior executives had refined the programme to seek candidates with “directly attributable linkage to business opportunity,” federal prosecutors said, citing internal JP Morgan Chase records. — AFP