That executive, Garth Peterson, was a star deal maker who had become a powerful figure on the Shanghai investment scene, people knowledgeable about the investigation said. His supervisor, the head of global real estate investing, was placed on administrative leave.
In China, which is struggling to deal with corruption and bribery, the revelation is the latest bit of sobering news after a wild real estate boom suddenly went bust late last year, leaving some of the world’s biggest financial institutions with potentially huge losses.
For Morgan Stanley, which runs one of the world’s biggest real estate funds, it is a black mark on an otherwise sterling reputation. People knowledgeable about the case say that Morgan Stanley has sent both United States and Chinese officials documents indicating that Mr. Peterson, the bank’s highest-ranking real estate executive in China, may have secured some transactions by offering cash or gifts to Chinese officials. His partners in some deals were Chinese government investment funds.
