Chief Executive Leung Chun-ying is facing fresh scrutiny concerning his youngest daughter’s 2010 internship at JP Morgan. His office has denied the summer internship opportunity involved any monetary transactions, and has stated there was no connection between the placement, Leung’s public office and a top manager of the bank who supported Leung’s election.
Leung Chung-yan, at the time a secondary school student, interned with the bank between July and August that year. Her father was, at the time, held three roles as the chairman of leading property service company DTZ Debenham Tie Leung Asia; the convener of the Executive Council; and a member of the Chinese People’s Political Consultative Conference.
Questions arose shortly after the US Securities and Exchange Commission (SEC) accepted an offer of US$264 million (HK$2 billion) last week from JP Morgan to settle an investigation related to a scheme which gave summer jobs to the children of friends of officials from foreign governments and foreign state-owned entities. JP Morgan, in turn, received business referrals.
The SEC document published on November 17 showed that the unpaid training programme in Hong Kong was created by the bank’s Asia Pacific branch, which was colloquially referred to as “summer camp” in order to “accommodate more client referrals.”
“The ‘summer camp’ consisted mainly of social events, lectures, and classroom speakers. Although the participants were not employed by JPMorgan APAC and were not paid, participants could list the program on their resumes,” it read. Chung-yan had highlighted the internship on her public LinkedIn profile.
During the investigation, an APAC Banker referred to as “B” noted that a senior APAC investment banker said that he could “sleep better at night knowing that we now have a structured program to entertain the little darlings.”
“[C]andidates for the ‘summer camp’ were selected based on investment bank client relationships rather than merit,” the document read.
“APAC Banker B noted in 2010 that sponsoring bankers ‘need to make a strong case for their referrals – minimum [US]$3m tangible fees sounds like a sensible benchmark.’,” it added.
Frontline Tech Workers Concern Group, a pro-democracy professional group which first raised the issue, saying that JP Morgan’s regular summer internship was not applicable to secondary school students.
The group asked in a social media post which of Leung Chun-ying’s three roles enabled him to pass JP Morgan’s US$3million threshold in order to recommend his daughter for the “summer camp.”
The group also said that even with his positions at that time, it would be difficult for him to guarantee US$3 million in revenue for the bank, as the business involved to generate such a fee would have to be in the hundreds of millions of Hong Kong dollars.
Hua Jing Society
Fang Fang, chief executive of JP Morgan China when Leung’s daughter took the summer job, started the Hua Jing Society in 2011 – a group of mainland elites who studied overseas and returned – to which Leung was the honorary sponsor. The society supported Leung’s run for Chief Executive in 2012, and Fang was appointed as a member of the government’s Commission on Strategic Development in 2013.
A spokesperson for the Chief Executive’s office told media – in response – that Leung Chung-yan’s internship did not concern Leung’s public positions, no money was involved, and it was unrelated to Fang.
In March, Chung-yan was involved in the “bag-gate” incident whereby her father allegedly used his position help her bypass security procedures to retrieve forgotten hand baggage at the airport. Leung Chun-ying denied any wrongdoing. The Airport Authority report said the incident did not violate any airport or international aviation security standards.