Another Controversy Surrounds JPMorgan Chase & Co. (NYSE:JPM)
News are now getting flooded with reporting of JPMorgan Chase & Co. (NYSE:JPM) paying $75,000 a month to Fullmark Consultants having only two employees to promote its standing in China. Lily Chang, a 32 year old executive runs an obscure consulting firm and in reality it was just the alias used by Wen Ruchun, then Prime Minister of China, Wen Jiabao’s only daughter. The alias is supposedly used so as Ms. Chang could underplay the public name recognition and influence to unlock business for JPMorgan Chase & Co. (NYSE:JPM). Ms. Wen, alike many other children of China’s ruling elite used her alias for both schooling as well as business.
The Chinese Elite
Ms. Wen used the name Lily Chang while doing her MBA at the University of Delaware as well as while working at Lehman Brothers and later at Credit Suisse Group AG (ADR) (NYSE:CS), reports the Dealbook.
JPMorgan Chase & Co. (NYSE:JPM)’s deal was certainly lucrative for Ms. Wen’s consulting firm which was paid a total of $1.8 million from 2006 to 2008. This accounts for approximately $900,000 annually against an average of $250,000 that many of Hong Kong investment bankers earn annually.
The New York Times Reporting
The New York Times’ review of Chinese public records, confidential documents and interviews with people pointed towards JPMorgan Chase & Co. (NYSE:JPM)’s broader strategy to promote its standing in China by appointing nation’s ruling elite’s relatives on the payroll. The Bank has also invested in companies linked to the Wen family.
The investigation began with a scrutiny of JPMorgan Chase & Co. (NYSE:JPM)’s decision to hire the son of a former Chinese banking regulator and the daughter of a Chinese railway official. The contract with Fullmark Consultants pointed the Bank’s relations touching highest ranks of political elite in China considering Ms. Wen father being Prime Minister of China for almost a decade since 2003 and her husband being an official at the China Banking Regulatory Commission since 2006.
A spokesman for JPMorgan Chase & Co. (NYSE:JPM) declined to comment and Ms. Wen or other family members were not reach for comments. While the United States attorney’s office in Brooklyn and the Securities and Exchange Commission which are leading the investigation also declined to comment.