Former JPMorgan managing director pleads not guilty to bribery charges relating to Kerry Logistics IPO


A former managing director of JPMorgan Securities (Asia Pacific) has pleaded not guilty to charges of bribery related to the US bank's hiring programme in Asia known as "Sons and Daughters", the District Court in Wan Chai heard on Thursday.

Catherine Leung Kar-cheung, a veteran banker who now runs her own venture capital company, appeared in court represented by barrister Charles Chan in front of District Court Judge Kwok Wai-kin.

A pre-trial hearing date has been set for December 6 while an eight-day hearing will be held from February 25, 2020. Leung could face a maximum penalty of up to seven years in jail if convicted.

The charges allege that in January 2010 Leung offered to hire Ang Ren-yi, the son of Kerry Logistics Network chairman Ang Keng-lam "in anticipation that Ang would return such favour by influencing Kerry Properties and/or Kerry Logistics to give business to JPMorgan Securities," senior public prosecutor Laura Ng wrote in a court document presented to the judge.

JPMorgan Securities hired Ang Ren-yi as a permanent staff member in June 2010 at an annual salary of HK$545,000 (US$69,753) plus a housing benefit of HK$180,000. In 2011, his pay was adjusted to HK$640,000 per year until he resigned in October 2011.

"Notwithstanding the son's low grade point average and lack of financial or accounting background, the defendant pressed for a permanent post for the son in JPM (JPMorgan) or JPMS (JPMorgan Securities)," Ng said in the court document.

Catherine Leung Kar-cheung attended proceedings at the District Court in Wan Chai. Photo: Fung Chang alt=Catherine Leung Kar-cheung attended proceedings at the District Court in Wan Chai. Photo: Fung Chang

The prosecutor said the hiring formed part of JPMorgan's "Sons and Daughters Program" or otherwise known as "Client Referral Program" which allows senior staff at or above the rank of executive director or managing director to refer candidates to take up junior posts at the bank in the role of analysts or associate while acting as their "sponsors".

In an internal email to her colleagues, Leung wrote that JPMorgan Securities was "a strong contender" for the IPO of Kerry Logistics.

"The defendant expressly suggested to her colleagues that hiring the son would help them to secure the imminent business opportunity, i.e. the IPO of Kerry Logistics," Ng wrote.

JPMorgan was not awarded any investment banking business related to the December 2013 listing of Kerry Logistics in Hong Kong. Kerry Logistics said none of its staff have accepted any advantages from JPMorgan Securities.

Hong Kong's anti-graft body, Independent Commission Against Corruption, searched JPMorgan Securities' offices to collect evidence and found internal correspondence showing Leung was heavily involved in pitching the Kerry Logistics IPO deal.

Leung is free to travel overseas for business under the terms of a HK$20,000 bail set by a Hong Kong court in May.

Prosecutor Glen Kong said he would present 10 witnesses, but did not reveal their identities. He told the judge that the prosecutors office may apply to the court to allow Leung's case to be merged with another under investigation as most witnesses of the two cases are in common . He did not provide details on the related case.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.