A former managing director of JPMorgan has been found not guilty of bribery after hiring the son of Kerry Logistics Network’s then chairman when the company was planning to go public 11 years ago.
Deputy District Judge Emily Cheung Sau-kwan on Monday concluded that Catherine Leung Kar-cheung, 52, did offer an advantage to Ang Keng-lam when she hired his son Ang Ren-yi as an analyst with JPMorgan Securities (Asia Pacific) on January 19, 2010.
But the judge could not be sure Leung had a corrupt intent when she could have made the offer with the aim of maintaining a good client relationship with Kerry Logistics, and mentioned the prospect of listing in her emails on the referral to show off her knowledge to her colleagues.
Cheung also found it possible that Leung was not familiar with the hiring process, but she had followed procedure in referring the candidate to the relevant decision makers, and could not be blamed when her colleagues obviously made a mistake and did not fulfil their gatekeeping duties to vet her referral.
“Ang Ren-yi’s application could be described as a mess,” the judge said.
Leung, who was JPMorgan’s head of Hong Kong investment banking until her departure in 2015, had pleaded not guilty to two counts of offering an advantage to an agent, an offence punishable by seven years in prison and a HK$500,000 fine.
She walked out of the dock and hugged her supporters after Cheung announced the acquittals following a three-hour delivery of the verdict, but declined to comment when asked how she was feeling.
JPMorgan declined to comment.
The District Court previously heard the hire was part of JPMorgan’s “sons and daughters programme”, also known as the “client referral programme”, which allowed senior staff to refer the children or relatives of the company’s existing and potential clients for training or employment, for the purpose of establishing good business ties.
But prosecutors said Leung’s offer was an inducement or reward for Ang Keng-lam to become, or remain favourably disposed towards JPMorgan in the engagement of investment banks or financial institutions for his company’s initial public offering.
They relied on her emails to show that she had a corrupt intent in the hiring.
“The last thing I want is we go slow and they ask another bank and I am sure someone will give him a full-time offer given the mandate up for grasp here,” she wrote to Kerwin Clayton, then head of industrials, who would go on to interview Ang Ren-yi. “We can give him an offer.”
Leung was also said to have expedited the application and offered Ang Ren-yi a job before he had completed legal and compliance checks, which would have examined whether there were any conflicts of interests arising from the hire.
That was said to be a departure from standard hiring procedures under the programme, which involved a three-step process – from referral to assessment and vetting – before human resources offered a contract.
Ang Ren-yi was given a two-year contract, starting on June 28, 2010, with an annual salary of HK$545,000 (US$69,753) plus housing benefits of HK$180,000. His annual pay was increased to HK$640,000 the following July, until he resigned on October 28, 2011, citing family reasons.
In defence, Leung’s counsel Joseph Tse Wah-yuen SC said internal emails showed that Leung had informed her colleagues about Ang’s family, and the potential business interest involved since she first referred him on January 10 that year.
Tse also noted that Leung’s referral was consistent with the purpose of the client referral programme, and that it was not done in secret.
It remains unclear whether JPMorgan’s legal and compliance department eventually approved Ang Ren-yi’s application, when the junior resources management division finally referred the case and made enquiries in March 2010, a month after he signed an employment contract.
Three staff members from those two divisions testified against Leung and were granted immunity from prosecution.
The court heard Kerry Logistics started making plans in 2009 to go public but that bid was put on hold the following year and Ang Keng-lam was not the sole decision maker in the process.
The company was eventually listed on December 19, 2013.
It did not engage – or even consider – JPMorgan since the American investment bank never formally pitched the deal.
I’d rather live with a good question than a bad answer.