Credit Suisse to pay US$77m over Chinese nepotism case

Switzerland's national flag flies next to the logo of Swiss bank Credit Suisse at a branch office in Luzern, Switzerland October 19, 2017. — Reuters pic
Switzerland’s national flag flies next to the logo of Swiss bank at a branch office in Luzern, Switzerland October 19, 2017. — Reuters pic

WASHINGTON, July 5 — Credit Suisse agreed to pay US$77 million (RM311.3 million) to US authorities after admitting it hired the under-qualified relatives of influential officials in order to win business, the government announced today.

The case emerges from the so-called princelings investigations, in which US authorities accused major of giving valuable jobs to relatives of Chinese government officials in return for lucrative government business.

JP Morgan Chase in November 2016 agreed to pay US$264 million to resolve similar allegations.

“Trading employment opportunities for less-than-qualified individuals in exchange for lucrative business deals is an example of nepotism at its finest,” said William Sweeney, the number two official at the Federal Bureau of Investigation’s New York division.

The United States criminalizes transnational bribery under a 1977 anticorruption law since copied by most other industrialized nations. The law prohibits giving “anything of value” to a foreign official in return for government business.

Federal prosecutors say Credit Suisse admitted that between 2007 and 2013, senior managers at Credit Suisse’s investment bank in Hong Kong hired, promoted and retained job candidates referred to the bank by government officials at state-owned enterprises.

The “relationship hires” were part of a quid-pro-quo that helped the bank win lucrative contracts.

“The criminal penalty imposed today provides explicit insight into the level of corruption that took place at the hands of Credit Suisse Group AG’s Hong Kong-based subsidiary,” Sweeney said in a statement.

Internal emails showed bank officials believed the hires were less qualified and that retaining the new employees would be “worthless” if it did not “translate into US$.”

One senior banker cautioned colleagues not to drag out the hiring process because the candidate in question was “a princess… not used to too many rounds of interview.”

Credit Suisse agreed to pay a US$47 million fine to the Justice Department, and about US$30 million in ill-gotten gains to the US Securities and Exchange Commission. — AFP

Source: The Malay Mail Online

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