The US House of Representatives Select Committee on China has issued subpoenas to JPMorgan Chase CEO Jamie Dimon and Bank of America CEO Brian Moynihan over their banks’ roles in underwriting the initial public offering (IPO) of Chinese battery manufacturer CATL. The committee alleges that CATL works with China’s military, which the company denies.
Background
The US government added CATL to a list of companies that allegedly aid Beijing’s military in January. Despite this, JPMorgan and Bank of America proceeded with underwriting CATL’s Hong Kong IPO, which raised $5.2 billion in May. The committee had urged the banks to pull out of the deal in April, citing “serious regulatory, financial, and reputational risks.”
Committee’s Action
The subpoenas, issued on July 23, require Dimon and Moynihan to comply by August 8. The committee is seeking documents related to the IPO, which it had requested in April. Bank of America produced 10 documents, nine of which were public, while JPMorgan produced one public document. The committee stated it has not received all the requested details.
Bank Responses
A Bank of America spokesperson said, “We’ve had constructive engagement with the committee and will continue to engage.” JPMorgan declined to comment.
Implications
The subpoenas signal rising legal and reputational risks for both banks. Their involvement with a company linked to China’s military underscores the possibility that future US sanctions could leave underwriters exposed to allegations of facilitating prohibited transactions.