A House committee focusing on the national security threat posed by China demanded that JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) produce documents related to their roles in a huge Chinese battery company's initial public offering, according to a media report.
The House of Representatives Select Committee on the Chinese Communist Party subpoenaed the companies' chief executives after the banks helped Contemporary Amperex Technology (OTC:CYATY) (OTC:CTATF), or CATL, list in Hong Kong in May, the Wall Street Journal reported, citing letters it had reviewed.
The committee, which had urged JPMorgan (NYSE:JPM) and BofA (NYSE:BAC) in April to pull out of the deal, said the banks had failed to produce information related to the IPO that it had previously requested.
CATL, which supplies batteries to electric vehicle makers like Tesla (TSLA), had been added to Department of Defense list that identifies companies as military in nature. The committee had said that participating in the IPO presented "serious regulatory, financial, and reputation risks" for the banks.
Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) continued with the IPO, which raised $5.2B, the largest IPO this year, the report said.
In an interview on Bloomberg Television in May, JPMorgan (JPM) CEO and Chair Jamie Dimon said the bank "did a lot of due diligence around the issues that people raised. If we thought it was wrong, we wouldn't do it."
A Bank of America (BAC) spokesperson said the company would continue to engage with the committee.
CATL said in a prospectus that it believes its inclusion in the Department of Defense list is a mistake, and that it's talking with the DoD to address the issue.
"It does not restrict us from conducting business with entities other than a small number of U.S. governmental authorities, thus is expected to have no substantial adverse impact on our business," CATL said in the prospectus.
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