Deutsche Bank Under Asia Hiring Practices Probe
Deutsche Bank under Asia hiring practices probe.Reuters

Regulators are probing Deutsche Bank's hiring practices in China, to determine whether Germany's largest bank hired the children of Chinese government officials to craft connections and build business.

Deutsche Bank said in its prospectus for a €6.75bn (£5.48bn, $9.21bn) rights issue that it was cooperating with the investigations which it said were centred on its hiring practices in the Asia-Pacific region.

The bank, however, did not name the regulators or individuals involved with the investigations, nor did it clarify if the probes were at an early or advanced stage.

Meanwhile, an unnamed source told Reuters that the probe is related to the bank's hiring in China.

Deutsche Bank said the aim of the probe was to "determine if any candidates were hired on the basis of referrals from executives at governmental entities including state-owned enterprises in potential violation of the Foreign Corrupt Practices Act or similar laws."

In November 2013, US authorities extended their investigation into banking recruitment in China to cover Morgan Stanley, following revelations that JPMorgan was being probed for its commercial relationship with the daughter of former Chinese Prime Minister Wen Jiabao.

Earlier that month, JPM Chase dropped plans to manage China Everbright Bank's $2bn Hong Kong IPO, just weeks before the Chinese lender's expected debut, amid a US probe of its hiring practices in China.

JPM was unable to underwrite the bank's share sale as investigations had delayed an internal approval process, Bloomberg reported.

Bank of America, Citigroup, Credit Suisse, Goldman Sachs and Macquarie have all hired relatives of top Chinese officials in the past.