JPMorgan Chase has stopped working on a Chinese firm's initial public offering amid an investigation by U.S. authorities into its hiring practices in China, people with direct knowledge of the matter told Reuters on Tuesday.
It is the second time JPMorgan has stepped aside from a Chinese IPO candidate while U.S. securities regulators look into whether the bank violated federal laws in hiring the relatives of current or potential clients with the sole purpose of winning business from them.
(Read more: Ondefensive, JPMorgan hired China's elite)
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JPMorgan has ended its IPO discussions with Tianhe Chemicals, the people said, as the supplier of lubricating oil additives to refiners such as China Petroleum and PetroChina was trying to move ahead with an around $1 billion deal. Thomson Reuters publication IFR said on Monday that Tianhe Chemicals hoped to launch the IPO in the second quarter of this year.
JPMorgan's exit was driven by concerns raised about the bank's employment of Joyce Wei, the daughter of Tianhe Chemicals Chairman Qi Wei, IFR reported, citing sources.
(Read more: Hiring in Chinaby JPMorgan under scrutiny)
Hong Kong securities license filings show that a Jiao Wei worked at JPMorgan from January 2012 to August 2013, and is now on the staff at UBS, joining the Swiss bank in October. Jiao is Joyce Wei's Chinese name, a person familiar with the mattertold IFR, affirming also that she is Wei's daughter. Another source said UBS ismandated to work on the Tianhe Chemicals IPO.
