J. P Morgan Chase & Co has withdrawn from a syndicate of banks working on a $2 billion Hong Kong listing by China Everbright Bank Co, a person familiar with the matter told Reuters. J. P Morgan's exit comes as it faces a number of investigations by US regulators, including a look into its hiring practices in China. US authorities are probing whether the bank improperly gave jobs to well connected people in Asia to win business.
J. P Morgan at one point hired Tang Xiaoning, the son of Tang Shuangning, chairman of Everbright Bank's parent, China Everbright Group, and a former bank regulator, The New York Times reported in August. After the younger Tang joined J. P Morgan, the bank won several important assignments from Everbright, including advising a subsidiary on a stock offering, the newspaper reported.
J. P Morgan has said it is co-operating fully with US regulators, but declined to comment further on Tuesday.
The New York Times reported earlier this month that J. P Morgan paid $1.8 million over two years to a small consulting firm run by the daughter of former Chinese Premier Wen Jiabao, a relationship that formed part of the wider US probe.
The US bank also faces a settlement for its liability to government agencies over mortgage securities.