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UBS suspends two bankers in China hiring probe

UBS has placed two employees on a leave of absence, including its top capital markets banker in Asia, while the Swiss bank investigates the hiring of the daughter of a potential Chinese corporate client.

Joseph Chee, head of capital market solutions at UBS, and a junior member of his team, Sharlyn Wu, were suspended last week.

The bank is conducting an internal investigation into whether the proper protocols were followed in the hiring of Joyce Wei, the daughter of the chairman of Chinese industrial company, Tianhe Chemicals.

Tianhe is pursuing a Hong Kong IPO later this year that could raise as much as $1 billion. More details of the IPO emerged last month when it was reported that JPMorgan Chase & Co. had dropped out of the offering process because of its previous employment of Wei.

According to regulatory filings, Wei joined UBS in October as a member of the bank’s equity and capital markets team, after leaving JPMorgan in August 2013.

Tianhe is not a Chinese state-owned company, so the UBS investigation is focused on whether its internal processes were followed or not.

At JPMorgan, however, the investigation is now in the hands of federal officials. The Securities and Exchange Commission and Department of Justice are investigating whether JPMorgan violated the Foreign Corrupt Practices Act by improperly hiring the relatives of well-connected Chinese officials to gain an advantage in a business deal or otherwise influence a Chinese official.

In a separate incident, as we reported on Monday, quoting the New York Times, JPMorgan’s CEO, Jamie Dimon, was asked by China’s top insurance regulator to hire a family friend of his as a “favor.”

Original reporting of the UBS staff suspensions can be found at International Financing Review.


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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