Fang Fang, JP Morgan Chase’s chief executive for investment banking in China, is planning to leave the bank (paywall). As Quartz has reported, Fang has a long history of close ties to the Communist Party, and during his tenure JP Morgan hired the sons and daughters of well-connected Chinese officials—a practice now under scrutiny by US regulators. Fang “recently told the bank he wanted to retire” after a decade there, the Wall Street Journal reported.
His departure comes as US regulators and prosecutors are investigating e-mails from Fang about the hiring of the son of China Everbright Group’s chairman. The bank won several assignments from Everbright after the hire. A Hong Kong-based spokeswoman at the bank did not respond to several requests for comment.
JP Morgan Chase was hardly alone in hiring the sons and daughters of top Chinese officials. But the bank is an emblematic example of the difficulties that foreign and particularly American institutions can run into as they navigate the upper echelons of Chinese finance. As Quartz wrote earlier:
As much as any Wall Street executive in China, Fang epitomizes the intersection of capitalism and Communist ideology that has led to decades of unparalleled economic growth in China. That system is now the subject of unprecedented scrutiny as China’s leadership cracks down on corruption on one hand, and US regulators look into whether party members’ children were used as conduits for influence peddling that may have violated the US Foreign Corrupt Practices Act.
US regulators and investigators are looking for proof that connects JP Morgan Chase’s hires with specific deals—a sensitive and fact-intensive inquiry, and one that is so controversial in China that mentions of the probe have been stricken from social media. On the bright side for Fang, thanks to his years of experience at Wall Street investment banks, he is unlikely to have a hard time finding a plum assignment at one of China’s massive banks, which are taking business from their foreign competitors.