U.S. banking giant JPMorgan Chase secretly hired the daughter of former Chinese Premier Wen Jiabao, paying her consulting firm $1.8 million (about Rs. 11.38 crore) over two years as the bank looked to expand its interests in China, >according to a report by The New York Times on Thursday.
The newspaper said the bank had agreed a lucrative $75,000-a-month contract with a little-known Beijing consulting firm, Fullmark Consultants, which comprised only two employees — Wen Ruchun, the then Premier’s daughter, and a friend.
The NYT report said authorities in the U.S. were looking into JPMorgan’s relations with Ms. Wen “as part of a wider bribery investigation into whether the bank swapped contracts and jobs for business deals with state-owned Chinese companies”.
The report suggested that the U.S. bank courted Ms. Wen for her connections at a time when her father — who served as Premier between 2003 and 2013 — served as the top official in charge of economic and regulatory affairs.
Its efforts, the NYT suggested, paid off: in one instance, Ms. Wen’s firm, Fullmark, claimed in a confidential letter that it had secured a lucrative deal for the U.S. company with the government-run China Railway Group.
Courting ‘princelings’
A number of foreign investment banks and private equity firms have, over the past decade, courted the children of influential Communist Party leaders — known in China as “princelings” — to further their connections — and business interests — in the country.
The amassing of wealth by Party princelings has emerged as a source of increasing resentment in China, prompting, in recent months, a campaign by dozens of activists calling on officials to disclose the assets of their families, as well as renewed calls from economists to reform influential and opaque State-owned enterprises.
>The NYT , in a separate investigation in 2012 , reported that the family of the former Premier had amassed a fortune in excess of $2 billion, hidden through a web of investment vehicles.
While the newspaper said it did not discover anything illegal in Ms. Wen’s dealings with JPMorgan, its findings are certain to raise difficult questions both for the bank and for the Chinese leadership.
The NYT reported that the bank had also held stakes in a private equity firm co-founded by Mr. Wen Jiabao’s son, Wen Yunsong, and owned nearly $1 billion worth of shares in the Ping An insurance company — one of China’s biggest firms — where >the Wen family held a stake, through a murky web of investment vehicles, that was valued at more than $2 billion in 2007, according to the newspaper’s 2012 investigation.
