Top China Banker for JPMorgan to Retire Amid Hiring Inquiry

HONG KONG â€" One of JPMorgan Chase’s top deal makers in China and a focus of the United States government’s investigation into the bank’s hiring practices in China is resigning, according to an internal memo sent to staff on Monday.

Fang Fang, who has spent more than a decade at JPMorgan, most recently as the bank’s chief executive for China and a vice chairman for Asia, had recently “informed us of his desire to retire,” Therese Esperdy, JPMorgan’s co-head of banking for Asia-Pacific, said in the memo.

Since last year, JPMorgan has been the subject of a federal bribery investigation in the United States that is looking into whether the bank’s “Sons and Daughters” hiring program violated the Foreign Corrupt Practices Act by linking the employment of the children of senior Chinese officials and business leaders to winning roles on specific investment banking deals.

Mr. Fang, who is in his late 40s, was one of several JPMorgan executives whose emails discussing hiring practices were turned over to the authorities by the bank. In one of them, he wrote: “You all know I have always been a big believer of the Sons and Daughters program â€" it almost has a linear relationship” with winning assignments to advise Chinese companies.

Neither Mr. Fang nor any JPMorgan executives have been accused of wrongdoing as a result of the United States investigation.

News of Mr. Fang’s departure was first reported on Monday by The Wall Street Journal.

After Mr. Fang’s resignation, JPMorgan appointed Frank Gong, another senior banker who was formerly the bank’s chief China economist, as its chairman of China investment banking, where he will focus on building client relationships, according to the internal memo.  

JPMorgan also promoted the bankers Brian Gu and Jing Zhao to co-heads of investment banking for China.

Mr. Fang has been seen as one of JPMorgan’s major rainmakers in China, an executive whose deep network of contacts in Chinese government and business circles helped introduce a flow of lucrative underwriting and advisory roles to the bank.

One such relationship, previously reported to be a subject of the investigation by the Securities and Exchange Commission and federal prosecutors in Brooklyn, is that between JPMorgan and China Everbright Group, a  financial services and banking group owned by the Chinese government.

In March 2010, Tang Shuangning, the chairman of China Everbright, approached Mr. Fang about a position for his son at the bank, records and interviews show. Mr. Fang welcomed the request and urged his colleagues in an email a day later to discuss “how we can leverage more on this account going forward.”

While the son, Tang Xiaoning â€" a former employee of Goldman Sachs and Citigroup â€" worked at JPMorgan, the assignments from his father’s company continued to pile up for the bank. In 2012, China Everbright International, a subsidiary focused on alternative energy businesses, hired JPMorgan to advise on a $162 million sale of shares, according to Standard & Poor’s Capital IQ, a research service.

In May of that year, as Mr. Tang’s contract was expiring, JPMorgan faced a turning point. But at the urging of Mr. Fang, Mr. Tang received an extension. “Given where we are on China Everbright, I think we may need another contract for Xiaoning,” Mr. Fang wrote.

In November 2013, several months after news of the United States investigation broke, JPMorgan removed itself as an underwriter on a share sale by China Everbright Bank, a subsidiary of the state-run group. China Everbright Bank went on to raise $3 billion in December, in Hong Kong’s biggest initial public offering of 2013.

In January, JPMorgan removed itself from a second deal over concerns about the hiring investigation, a planned $1 billion Hong Kong I.P.O. by Tianhe Chemicals, which is not owned by the state. JPMorgan had previously employed the daughter of the company’s chairman.

Before joining JPMorgan in Hong Kong in 2001, Mr. Fang was a vice president of Beijing Enterprises Holdings, a state-owned investment company listed in Hong Kong. Before that, he worked as an investment banker at Merrill Lynch in both Hong Kong and New York.

Mr. Fang’s government ties were bolstered in 2011, when he was appointed as a member of the Chinese People’s Political Consultative Congress, a state advisory body with over 2,000 members including government officials but also celebrities and businessmen. A Chinese national, Mr. Fang graduated from Tsinghua University in Beijing and received his M.B.A. from Vanderbilt University in Nashville.