According to people who were familiar with the process, JP Morgan Chase & Co withdrew from its role as an underwriter for the upcoming initial public offering of China Everbright Bank Co on Tuesday. The bank was seeking to raise USD2 billion in its planned public listing. However, the sources, who refused to be identified, did not reveal why the Wall Street bank decided to not participate in Everbright's IPO. According to the Wall Street Journal, underwriters rarely pull out from a deal, and that a pull out by an underwriter weeks before order-taking would start was also unlikely to happen.

The voluntary exit of JP Morgan reportedly came at the heels of a series of investigations launched by US regulators at the bank. The regulators, including the US Justice Department and the US Securities and Exchange Commission, were investigating the practices of the bank regarding its hiring of bankers in relation to Chinese officials.

US regulators had looked into questionable hires of Tang Xiaoning and Zhang Xixi. Tang is the son of the chairman of the China Everbright Group, while Zhang is the daughter of a state railway official. Regulators are looking into an angle how Tang and Zhang's appointments may have contributed to JP Morgan winning deals from state-controlled China Railway Group and Everbright, said an unnamed source who was familiar with the matter in August.

When asked for comment about the report, China Everbright Bank declined to provide a statement.

The Everbright bank is a subsidiary of the China Everbright Group, a state-owned firm that provides a multitude of financial services. The Chinese bank is currently determining investor demand regarding its plans for an IPO. This would be the third time Everbright had attempted to get listed, and the IPO will be launched on the Hong Kong Stock Exchange. Although the Chinese bank has yet to take orders, it is aiming for a December listing, said people who were familiar with the transaction earlier.

In addition to JP Morgan, Everbright had tapped UBS AG, Morgan Stanley and China International Capital Corp as underwriters for its IPO, the people said.