Asian Legal Business (SE Asia) Feb 2010

ISSUE 10.2

Asia’s investment banks

Financial crisis could crack status quo

India’s liberalisation

High Court ruling sets back foreign ambitions

IP protection

Should you put money on it?

M&A 2010

Why sovereign wealth funds will be kings of the market Lateral moves ISSN 0219 – 6875 MICA (P) 215/07/2009

Deals Roundup Region-wide updates debt & Equity market intelligence

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Country editors The Regional Updates section of ALB is sponsored by the following firms: China Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 500 lawyers worldwide. Paul, Weiss is headquartered in New York and has offices in Hong Kong, Beijing, London, Tokyo and Washington D.C.

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Philippines Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law firms, and the largest, in the Philippines. Principally based in Makati City, the country’s financial and business center, the firm also has offices in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fields of law and the broad range of the firm’s expertise is reflected in its client base, which includes top local and foreign corporations, international organizations and governments. SyCip combines traditions of professional integrity and excellence with a time-tested ability to break new ground.

Singapore Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work. With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. Loo & Partners has been regularly noted for its IPO, M&A and general corporate work.

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Vietnam Indochine Counsel is a commercial law firm focusing on business law practice in the Indochina region. Our areas of practice include: Foreign Investment, Corporate & Commercial, M&A, Securities & Capital Markets, Banking & Finance, Property & Construction, Taxation, Intellectual Property, Information Technology & Internet, International Trade, Outward Investment & Offshore Incorporation, and Dispute Resolution.

Malaysia Wong & Partners is a Malaysian law firm dedicated to providing a quality and solution-oriented legal services to its clients. Wong & Partners has grown steadily with international standards of quality and experience and the Firm has a solid commitment to training its lawyers, and invests in training, professional development and quality management programs with the aim of producing lawyers of global standard.

Practice area and industry editors

The Regulatory Updates section is sponsored by the following firms:

Environmental law / Intellectual property ATMD Bird & Bird is a dynamic and progressive firm with an established IP, corporate & commercial, competition and dispute resolution practice. The firm also has an extensive regional experience advising both domestic and foreign clients on cross-border transactions. ATMD Bird & Bird has been voted as Singapore’s Intellectual Property Firm of the Year at the 2005 and 2006 ALB Awards and the 2005 AsiaLaw (IP) Awards.

Financial services Horwath Financial Services (www.hfs.com.hk), an independent member firm of Horwath International (www.horwath.com), provides a one-stop solution for your financial planning, investment, property-financing and general financial health needs. We offer a range of payment options for our services including a feebased alternative setting us apart in an industry that is dominated by commission driven sales.

International tax AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and International, tax advisory and trustee services your tax plan is comprehensively implemented. Our advice provides you with independent innovative and rigorous solutions which deliver results and longterm accountability. We are qualified UK, US, Hong Kong and PRC tax advisors and complete tax filings for UK, US and Hong Kong tax returns.

Islamic Finance Azmi & Associates is reputably known as one of Malaysia’s leading firms in the areas of Mergers & Acquisitions, Capital & Debt Market, Corporate & Commercial, Energy & Utilities, Restructuring, Projects, Construction, Privatisation and Financing, Litigation and Arbitration and is also rapidly building its reputations in the areas of Intellectual Property and information technology.

IT

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1

EDITORial >>

Intellectual property: the new financial intangible?

T

here’s no denying that exciting times lie ahead for IP in Asia. Gone are the days when it was entirely justifiable to suggest that the region was ‘weak’ on rights protection. Now it is Asia boasting some of the most sophisticated – and well-developed – IP regimes in the world.

China definitely falls into this category and it is only fitting that, as formerly one of the worst offenders when it comes to IP, the country has so quickly transformed itself (and notably, many of its Asian trading partners) into a bastion for its protection.

Of course, China still has a long way to go and much work still to do to convince western companies that their IP is safe there, but one certainly can’t fault the commitment of regulators and industry to this cause. From making continuing revisions to its patent laws, guidance notes and ‘case law’, China’s evolution from IP pariah to IP champion is guaranteed to continue. Its growing cache of entrepreneurs will no doubt drive the country further up the IP value-chain.

While China and arguably most other countries in the region are in the throes of modernising their attitudes towards rights protection, their western counterparts are exploring IP as an asset class in its own right. They are leveraging their IP portfolios as collateral for financing, using it in complex sale and lease-back deals, and even allowing parts of it to be packaged, bundled and sold as interest-bearing rolling loans.

Yet while many in the industry are excited by the very prospect of IP being used in this way, one has to ask what impact the financial crisis and the concerns it has raised over the use of intangible financial products will have on this trend. The suite of financial institutions already offering IP holders working capital and loan guarantees to ‘unlock their full potential’ suggests very little. Still, caution is needed, more so for those burgeoning companies in Asia whose IP is often the biggest asset.

There has never been a better opportunity for IP lawyers across Asia to showcase their commercial wares to their clients by helping them navigate these changes, and by playing a role in helping clients unlock the potential of their IP. Just as these are quite exciting times for IP owners, so too are they for IP lawyers.

IN THE FIRST PERSON “Clients may want a change from the bureaucracy of the more established [investment banking] players. They may want to work with a nimbler more adaptive organisation rather than a super-tanker” Peter Siembab, general counsel, Nomura (pg 11)

“We took the time to search for the most fitting associate Hong Kong firm, because it is a determining factor to our office’s success and ability to offer quality services” Zhang Xuebing, Zhong Lun (pg 24)

“A country like China perceives itself as making the transition from being an importer and consumer of innovation and turning into an exporter of these, therefore revisiting its attitudes to IP” Horacio Gutierez, corporate vice president, Microsoft (pg 35)

While China and arguably most other countries in the region are in the throes of modernising their attitudes towards rights protection, their western counterparts are exploring IP as an asset class in its own right 2

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News | deals>> >> CONTENTS

contents

ALB issue 10.2

34

50

COVER STORY 40 M&A

The M&A market in Asia is improving, but will action match improved sentiments? ALB looks at recovery prospects major markets in Asia

ANALYSIS 10 Asia’s IB’s go international While the financial crisis has come as a blessing for Asia-based investment banks, will accelerated expansion plans benefit the AsiaPacific region in the long term?

12 Climate change: legal lessons from Copenhagen Just how lucrative is the new market for ‘eco’ practices and legal advice? Whether on the ground in Copenhagen or launching new practices, these firms have responded to the climate change sweeping Asia’s law firms 14 Aviation work soars for Asia Japan Airlines’ multi-million dollar restructuring is not only big news for the region, but for Asia’s law firms, it’s among a number of recent aviation deals flying in 16 Passage to India Why a landmark decision from India’s High Court in a case lost by big firms White & Case, Ashurst and Chadbourne & Parke could mean a change to ‘best-friend’ alliances – and ultimately, the future of foreign firms in India

FEATURES 34 IP ALB looks at what have been keeping Asian lawyers busy and the new challenges awaiting them macroeconomic conditions improve

4

48 In-house perspective Jaclyn Jhin demonstrates how focus and determination allows working mothers to scale the corporate career ladder 50 ALB Managing Partner Series Why a romantic idea about conquering the wild, wild East drove Rodyk & Davidson’s Helen Yeo to push ahead with expansion plans 54 Offshore firms: Going for BRIC Offshore firms are looking to new jurisdictions to set up – especially those with favourable tax treaties with the BRIC nations 62 Forensic accounting With the rising tide of corporate fraud, insolvencies and litigation proceedings in Asia, the forensic accountant will be increasingly important for the region’s lawyers.

Regulars 6 DEALS 18 NEWS • Nishimura to open in Beijing; finds China practice ally • Zaid Ibrahim becomes first Asian law firm in Australia • Singapore short in court: Attorney General to compete with law firms for talent 18 UK Report 20 US Report 58 Capital markets deal update 60 M&A deal update

62 INDUSTRY UPDATES 22 Energy & resources ATMD Bird & Bird 23 Islamic Financial Azmi & Associates 24 Intellectual property ATMD Bird & Bird 25 International Tax AzureTax 27 IT Guidance Software 30 REGIONAL UPDATES • China Paul Weiss • Singapore Loo & Partners • Philippines Sycip Salazar Hernandez & Gatmaitan • Vietnam Indochine Counsel • Malaysia Wong & Partners

PROFILES 36 39 44 57

ATMD Bird & Bird Lee & Lee Loo & Partners Appleby

Asian Legal Business ISSUE 10.2

International TRademark Association

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Register by March 26 and take advantage of the early bird registration fee!

www.inta.org/go/boston

NEWS | deals >>

deals in brief

| QATAR | ►► Qatar rail project Value: US$25bn

| SINGAPORE | ►► Senoko Power senior and mezzanine debt financing Value: US$1.8bn

Firm: Patton Boggs Lead lawyer: Rob Hager Client: Qatar Diar Firm: Denton Wilde Sapte Lead lawyers: Safwan Moubaydeen, Leigh Hall Client: Deutsche Bahn

Firm: Latham & Watkins Lead lawyers: Joseph Bevash, Michael Yoshii, Clarinda Tjia-Dharmadi Client: Senoko Powe Firm: TSMP Client: Lenders Leigh Hall Denton Wilde Sapte

• One of largest infrastructure projects in the Middle East

| UAE | ►► KEPCO- ENEC Nuclear Power Project Value: US$40bn Firm: Lee & Ko Lead lawyer: Jongkwan Peck Client: KEPCO Consortium Firm: Pillsbury Jongkwan Peck Lead lawyers: Charles Petersen, Lee & Ko George Borovas Client: Emirates Nuclear Energy Corporation • Consortium led by Korean Power Corporation (KEPCO) wins bid to deliver four units of 1400MW reactors to ENEC by 2020 • Largest nuclear power deal in the world to date; Korea’s first overseas nuclear power project • Firms began assisting clients

HEADLINE DEAL

in March 2009 during bidding process – Lee & Ko assisted KEPCO consortium in discussions, helping KEPCO through second bidding process Also worked with KEPCO’s Overseas Nuclear Power Projects Division on all aspects of the transaction, negotiation sessions in Abu Dhabi and Seoul and KEPCO’s internal meetings • Lee & Ko can trace relationship with KEPCO back as far as early nuclear projects of the 1970s. More recently, worked on negotiations with the Korean Peninsula Energy Development Organisation (KEDO) in respect of the ‘Turnkey Contract’ for the supply of light water reactor project to North Korea • Pillsbury’s relationship with Abu Dhabi government entity took off after its work for US energy company Thorium Power

“Given the growing importance of environmental issues, nuclear energy is expected to become a major avenue for power production in the future, and KEPCO is poised to be a powerhouse in the industry with this landmark deal” Jongkwan Peck, Lee & Ko 6

Firm: Rajah & Tann Client: Senoko Power

• Denton is chief legal advisor to Deutsche Bahn (project operators).

Doha managing partner Leigh Hall worked alongside Amman managing partner Safwan Moubaydeen on Qatari laws, structuring corporate and finance models, and PPP arrangements • Deutsche Bahn formed JV with state-owned investment firm Qatar Diar in 49-51% ownership structure • Patton Boggs’ Doha managing partner Rob Hager is working with Qatar Diar’s in-house legal director Ahmed Elbagir

“This is a huge project [which] will transform the country’s transport system … and is expected to take up to 15 years to fully complete. It is also seen as an integral component in Qatar’s bid for the 2022 football World Cup” Leigh Hall, Denton Wilde Sapte

Firm: Allen & Overy Lead lawyers: Ashley Young, John Richards Client: Lenders Firm: Clifford Chance Client: Development Bank of Japan • Senoko Power finance made up of complex structure of senior term debt, mezzanine debt and multicurrency loans which also led to requirement for swap contracts • Incorporating swap contracts into deal required complicated intercreditor arrangements to accommodate needs of both debt and hedging counterparties • Latham & Watkins also represented shareholders in 2008 acquisition of Senoko Power for S$3.65bn and related financings

►► KS Energy–privatisation of distribution business Value: US$229m Firm: Clifford Chance Client: Actis Firm: Stamford Law Corporation Lead lawyers: Lee Suet Fern, Ng Joo Khin, Lean Min-tze, Ashok Kumar Client: KS Energy Firm: WongPartnership Lead lawyers: Andrew Ang, Carol Anne Tan, Khaw Gim Hong Client: Actis

Lee Suet Fern Stamford Law Corporation

Andrew Ang WongPartnership

Asian Legal Business ISSUE 10.2

NEWS | deals >>

• Consolidation of the oil & gas and marine distribution businesses of KS Energy via merger of three listed companies • Stamford previously advised KS Energy on China-related deals; firms hope to continue with client in its expansion of operations following consolidation. Firm dealt with PE element prior to announcement and at closing

| MALAYSIA |

►► your month at a glance Firm

Jurisdiction

Deal name

Akin Gump Al-Jadaan & Partners Allen & Gledhill

Korea Saudi Arabia Malaysia Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Saudi Arabia Saudi Arabia Singapore UAE Indonesia India/US India India India India India India India Hong Kong Indonesia Japan/US/EU/China/China India India India India UAE/India India India India India India Malaysia Korea Indonesia India India Malaysia Oman Pan-Asia Saudi Arabia UAE China Singapore Singapore UAE/India UAE China UAE India China/Hong Kong Singapore Korea Hong Kong India/US India Qatar Oman Qatar

Avenue Capital– MagnaChip Semiconductor acquisition Gulf International Bank bond issue Safeena shariah shipping investment Mermaid Maritime rights issue Majlis Ugama Islam Singapura Sukuk Ijarah issue due 2014 Starhill Global REIT–David Jones Building Perth acquisition OCBC subordinated notes issue due 2019 CapitaMalls Asia IPO Pastel Limited–Bharti Group share purchase Perennial Katong Retail Trust–Katong Mall acquisition Temasek Financial notes offering Avago Technologies IPO Cirrus Navigation–ACS Shipping acquisition Gulf Finance House rights issue Gulf International Bank bond issue Senoko Power senior and mezzanine debt financing GE Capital sukuk Asia Pacific Breweries–PT Multi Bintang Indonesia stake acquisition ICICI Bank bond offer 2009 Experian International JV Millipore Corporation- Bagaria share acquisition Hindalco Industries QIP Tata Steel bonds issue due 2014 Abbott Laboratories–Wockhardt group health division acquisition Bharat Forge Limited–Alstom Power JV UTI Asset Management–T Rowe Price JV Ming An Holdings privatisation Asia Pacific Breweries–PT Multi Bintang Indonesia stake acquisition Panasonic–Sanyo merger Millipore Corporation- Bagaria share acquisition CapitaRetail Jalandhar Mall–Francolin Infrastructure investment Hindalco Industries QIP Telstra–Microland Investments JV Wipro–Lornamead personal care acquisitions Tata Realty and Infrastructure–Atlantia S.p.A. JV MD Investors Corporation -Metaldyne Industries acquisition Tata Steel bonds issue due 2014 Abbott Laboratories–Wockhardt group health division acquisition Bharat Forge Limited–Alstom Power JV Safeena shariah shipping investment Credit Suisse Asset Management–Woori Asset Management divestment PT BW Plantation IPO Dish TV India GRD issue Abbott Laboratories–Wockhardt group health division acquisition Safeena shariah shipping investment Salalah Independent Water and Power Project Schramm Holding AG IPO Gulf International Bank bond issue GE Capital sukuk China Minsheng Banking Corp IPO KS Energy - privatisation of distribution business Senoko Power senior and mezzanine debt financing Wipro–Lornamead personal care acquisitions Gulf Opportunity Fund -Gulf Cryco stake acquisition China Forestry Holdings IPO GE Capital sukuk UTI Asset Management–T Rowe Price JV Sands China IPO Temasek Financial notes offering Hyundai Capital Services 6% notes offer due 2015 First Pacific Company rights offering ICICI Bank bond offer 2009 Petroleum Trust $763m Block Trade sale Qatar rail project Salalah Independent Water and Power Project State of Qatar bond offer

Allen & Overy

Amarchand & Mangaldas

►► Safeena shariah shipping investment Value: Undisc Firm: Ince & Co Client: Safeena Lead lawyer: Martin Brown

Appleby Arfat Selvam Alliance Arnold & Porter AZB & Partners

Firm: Azmi & Associates Client: Safeena Lead lawyer: Ahmad Lutfi Abdull Mutalip Firm: MKK Client: Safeena Lead lawyer: Craig Heggie • Unique Islamic finance investment deal for Malaysia’s only Islamic shipping fund, Safeena. Deal structured through deferred purchase and forward lease arrangement.

• Ince & Co spent several months with Safeena structuring investment to comply with Shariah laws – drafting purchase and lease documents; structuring investment with conventional (non-Islamic) financing arrangement for sister vessel. First purchase and forward lease structure (also called a istisna'a-ijarah structure) used by shipping fund • Ince & Co approached by Safeena due to Brown’s prior experience on conventional and Islamic financing deals. Will be appointed in upcoming transactions that Safeena and the financial arrangers will be involved in • Azmi & Associates retained through Ince & Co, advising on legality/enforceability of legal documentation and fund structure to meet local law requirements

Azmi & Associates Bae, Kim & Lee Baker & McKenzie

Blank Rome Century-link Law Office CIMA Consultores Economistas y Abogados, S.L Clifford Chance

Clyde & Co Conyers Dill & Pearman Dave Girish and Associates Davis Polk & Wardwell

Denton Wilde Sapte

Dhir and Dhir

India

CapitaRetail Jalandhar Mall–Francolin Infrastructure investment

DLA Piper

Korea Malaysia Pan-Asia China China China/Hong Kong China India UAE/India China Malaysia Hong Kong Hong Kong Pan-Asia Malaysia Pan-Asia India Hong Kong Hong Kong Malaysia

Avenue Capital–MagnaChip Semiconductor acquisition MOL AccessPortal Berhad–Friendster acquisition Schramm Holding AG IPO New World China Land rights issue China Investment Corporation–GCL-Poly acquisition Sands China IPO China Minsheng Banking Corp IPO UTI Asset Management–T Rowe Price JV Wipro–Lornamead personal care acquisitions China Minsheng Banking Corp IPO MOL AccessPortal Berhad–Friendster acquisition PCD Group global offering First Pacific Company rights offering Schramm Holding AG IPO Safeena shariah shipping investment Schramm Holding AG IPO Hindalco Industries QIP The Wharf MTN update Minmetals Land top-up placement TAR–HIT Entertainment, Sanrio licence agreement

Eversheds Freshfields

Gordons Solicitors Grandall Gunderson Dettmer Herbert Smith Hills & Co Ince & Co International Legal Counsellors Thailand Jones Day JSM in assoc. Mayer Brown Kadir Andri & Partners

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Value (US$m) 62 533 Undisc 111 20 120 500 1,780 385 176 1,500 750 Undisc 500 533 1,800 500 208 750 Undisc 58 600 546 130 213 138 239 208 9,400 58 20 600 Undisc 45 44 465 546 130 213 Undisc Undisc 70 100 130 Undisc 1,000 23 533 500 3,900 229 1,800 45 Undisc 203 500 138 2,500 1,500 500 282 750 750 25,000 1,000 7,000 20 62 Undisc 23 683 709 2,500 3,900 138 45 3,900 Undisc 378 282 23 Undisc 23 600 1,000 123 Undisc

Deal type M&A Debt market Islamic finance Equity market Islamic finance M&A Debt market Equity market M&A M&A/Property Equity market Equity market M&A/Shipping Equity market Debt market Finance Islamic finance M&A Debt market Corporate finance M&A Equity market Debt market M&A Corporate M&A Corporate M&A M&A M&A M&A Equity market Corporate M&A Corproate M&A Debt market M&A Corporate Islamic finance M&A Equity market Equity market M&A Islamic finance Project finance Equity market Debt market Islamic finance Equity market Corporate Finance M&A M&A Equity market Islamic finance M&A Equity market Debt market Debt market Equity market Debt market Equity market Project finance Project finance Debt market M&A M&A M&A Equity market Equity market M&A Equity market Equity market M&A M&A Equity market M&A Equity market Equity market Equity market Islamic finance Equity market Equity market Equity market Equity market Corporate

7

NEWS | deals >>

| UAE | ►► GE Capital sukuk Value: US$500m

Firm: Conyers Dill & Pearman Client: GE Capital Lead lawyer: David Cooke Firm: Allen & Overy Client: GE Capital Lead lawyer: Anzal Mohammed Firm: Clifford Chance Client: Citi/Goldman Sachs • GE Capital’s offering of sukuk certificates, to diversify alternative funding sources • First such offering issued by major US company - first of its type to be used to finance aircraft leasing

| INDIA | ►► Hindalco Industries QIP Value: US$600m

Firm: AZB & Partners Lead lawyer: Shameek Chaudhuri Client: Global coordinators and bookrunners Shameek Firm: Jones Day Chaudhuri Lead lawyers: AZB & Partners Jeffrey Maddox, Manoj Bhargava, Karun Cariappa, Dhiraj Joseph Client: Global coordinators and bookrunners

8

Firm: Amarchand & Mangaldas Client: Hindalco Industries • Hindalco is fifth-largest Manoj Bhargava aluminium Jones Day producer in Asia. Deal marks second-largest Indian QIP in 2009 (follows Axis Bank's $625 m deal) • Jones Day collaborated closely with Amarchand & Mangaldas and Hindalco to ensure requests from financial arrangers were met from a legal perspective • Hindalco did not engage international legal counsel - Jones Day assisted company with US legal issues that arose during the course of the QIP • Both AZB and Jones Day advised financiers in Hindalco’s 2008 US$1.1bn rights offering

| KOREA | ►► Standard Chartered First Bank Korea–Eugene Corporation stock acquisition Value: US$29m

in Eugene Corporation stock, convertible into shares.

Client: Schramm Holding AG

• Eugene Corporation produces concrete and asphalt concrete, controls appliance retailer Hi-Mart

• First ever listing by German joint stock company on HKSE; first European company on HKSE main board

• Standard Chartered are notable clients of K&C – advised 2005 Standard Chartered-Korea First Bank acquisition

• Eighth IPO project for DLA Hong Kong in 2009. Seven-lawyer team from HK and Frankfurt offices coordinated deal. Reconciling differences between German laws and Hong Kong laws, and shareholder protection standards expected of overseas company under listing rules

• Yulchon previously advised Eugene on 008 US$2bn acquisition of HiMart

| HONG KONG | ►► Schramm Holding IPO Value: US$23m

Firm: Lee International IP & Law Group Client: Schramm Holding AG Firm: Lee and Li Client: Schramm Holding AG Firm: International Legal Counsellors Client: Schramm Holding AG Firm: Ramrais & Partners Client: Schramm Holding AG Firm: Hills & Co Client: Schramm Holding AG

Firm: Yulchon Client: Eugene Corporation

Firm: CIMA Consultores Economistas y Abogados Client: Schramm Holding AG

Firm: Kim & Chang Lead lawyer: Myoung-Jae Chung Client: Standard Chartered First Bank Korea

Firm: DLA Piper Lead lawyers: JC Lee, Esther Leung Client: Guotai Junan Capital, Samsung Securities

• Standard Chartered First Bank Korea subscribed to KRW30bn

Firm: Norton Rose Lead lawyers: Justin Wilson, Michael Malterer, Richard Crosby, Stanley Lai

• Norton Rose also advised on future listing of German companies in Hong Kong. Decision by HKSE rendered in August 2009. Has advised Schramm's expansion in Asia and the United States since 2005: acquisition of three factories in Tianjin, Shanghai and Huizhou and of IP-rights from SSCP

JAPAN | ►► Mitsubishi UFJ Financial Group–securities offering Value: US$12.1bn Firm: Paul Weiss Lead lawyers: Tong Yu, Peter Rothenberg Client: MUFG Firm: Nagashima Ohno & Tsunematsu Lead lawyers: Toshio Kobayashi, Masaki Konishi Client: MUFG Firm: Mori Hamada & Matsumoto Lead lawyers: Toru Ishiguro, Taro Omoto Client: Morgan Stanley, Mitsubishi UFJ Securities, Nomura Securities, J.P. Morgan

Asian Legal Business ISSUE 10.2

NEWS | deals >>

Firm: Simpson Thacher & Bartlett Lead lawyer: Alan Cannon Client: Morgan Stanley, Mitsubishi UFJ Securities, Nomura Securities, J.P. Morgan

►► your month at a glance (CONT) Firm

Jurisdiction

Deal name

Khaitan & Co

India India India India India Korea/Netherlands Korea Korea Korea Korea/Netherlands China Korea Qatar Singapore Hong Kong Singapore India/US Korea UAE/Korea Pan-Asia Pan-Asia India China Malaysia Malaysia Japan/US/EU/China/China China/Hong Kong Japan/US/EU/China/China India India India India China Pan-Asia China Japan/US Hong Kong Korea Qatar UAE/Korea India Singapore Pan-Asia China Hong Kong China Oman Oman Korea China/Hong Kong Korea Japan/US/EU/China/China Taiwan Qatar Saudi Arabia Singapore Singapore Singapore

Mahindra Navistar Automotives project financing KSK Energy Ventures QIP India Agribusiness Fund–Geepee Agri investment Hospira – Orchid pharma acquisition Tata Steel–Hooghly Met Coke & Power acquisition Ion Investments B.V–Seoul Semiconductor acquisition Credit Suisse Asset Management–Woori Asset Management divestment General Motors–Delphi Corporation steering business acquisition Avenue Capital–MagnaChip Semiconductor acquisition Ion Investments B.V–Seoul Semiconductor acquisition China Minsheng Banking Corp IPO Avenue Capital–MagnaChip Semiconductor acquisition State of Qatar bond offer Senoko Power senior and mezzanine debt financing Ming An Holdings privatisation Temasek Financial notes offering ICICI Bank bond offer 2009 Avenue Capital–MagnaChip Semiconductor acquisition KEPCO–ENEC Nuclear Power Project Schramm Holding AG IPO Schramm Holding AG IPO Tata Steel bonds issue due 2014 New World China Land rights issue TAR–HIT Entertainment, Sanrio licence agreement Safeena shariah shipping investment Panasonic–Sanyo merger Sands China IPO Panasonic–Sanyo merger Mandhana Industries–SIL share acquisition India Strategic Opportunities Fund–Precision Automation and Robotics Aquarius India Fund–Vijay Nirman investment Sunteck Realty QIP New World China Land rights issue Schramm Holding AG IPO China Forestry Holdings IPO C&M Packaging–C&M Fine Pack acquisition One Equity Partners–China Medicine investment Avenue Capital–MagnaChip Semiconductor acquisition Qatar rail project KEPCO–ENEC Nuclear Power Project UTI Asset Management–T Rowe Price JV Senoko Power senior and mezzanine debt financing Schramm Holding AG IPO China Forestry Holdings IPO First Pacific Company rights offering China Investment Corporation–GCL-Poly acquisition Salalah Independent Water and Power Project Salalah Independent Water and Power Project Avenue Capital–MagnaChip Semiconductor acquisition Sands China IPO Hyundai Capital Services 6% notes offer due 2015 Panasonic - Sanyo merger GigaMedia–Mangas Gaming alliance State of Qatar bond offer Gulf Finance House rights issue e-Rewards–Research Now acquisition KS Energy–privatisation of distribution business Ying Li International Real Estate share placement

Woo Kwan Lee & Lo

Singapore Japan/US/EU/China Indonesia Saudi Arabia Singapore Malaysia India Malaysia China/Hong Kong Singapore Japan/US/EU/China/China Singapore Singapore Singapore Singapore Hong Kong

AEP Investment Management–DataOne JV Panasonic–Sanyo merger Asia Pacific Breweries–PT Multi Bintang Indonesia stake acquisition Gulf Finance House rights issue Senoko Power senior and mezzanine debt financing Safeena shariah shipping investment Abbott Laboratories–Wockhardt group health division acquisition Safeena shariah shipping investment Sands China IPO Schulte Group newbuilding financing Panasonic–Sanyo merger KS Energy–privatisation of distribution business CapitaMalls Asia IPO Carlsberg Brewery Malaysia–Carlsberg Singapore acquisition Lion-Asia Resources–Polaris Metals NL acquisition Ming An Holdings privatisation

Undisc 9,400 208 500 1800 Undisc 130 Undisc 2,500 150 9,400 229 2 109 92 239

Corporate M&A M&A Equity market Finance Islamic finance M&A Islamic finance Equity market Finance M&A Corporate Equity market M&A M&A Corporate

Yulchon Zhong Lun

Korea Japan/US/EU/China/China

Hyundai Capital Services 6% notes offer due 2015 Panasonic - Sanyo merger

500 9,400

Debt market M&A

Kim & Chang

Tong Yu Paul Weiss

• Mitsubishi UFJ Financial Group (MUFG) has completed a follow-on offering Toshio Kobayashi of 2.5bn shares Masaki Konishi of common stock. Largest securities offering in Japan seen in the past decade • Japanese law firms Nagashima Ohno & Tsunematsu and Mori Hamada & Matsumoto were engaged to deal specifically with Japanese law issues • Paul Weiss has acted as US securities counsel to MUFG since it first listed on the NYSE in 1989

“Nagashima Ohno & Tsunematsu and Paul Weiss have worked together on a number of offerings for MUFG in recent years so the teams worked together seamlessly on overlapping parts, there was a lot of coordination and cooperation between the two firms” Tong Yu, Paul Weiss

Kim, Chang & Lee King & Wood Latham & Watkins

Lee & Ko Lee and Li Lee International IP & Law Group Linklaters Maples and Calder Milbank, Tweed, Hadley & McCloy MKK Mori Hamada & Matsumoto MWE China Nagashima Ohno & Tsunematsu Nishith Desai Associates

Norton Rose Orrick

Pachulski Stang Patton Boggs Pillsbury Platinum Partners Rajah & Tann Ramrais & Partners Reed Smith Richards Butler

Said Al Shahry Law Office Shearman & Sterling Shin & Kim Sidley Austin Simpson Thacher & Bartlett Skadden Slaughter and May Stamford Law

Sullivan & Cromwell Trilegal Trowers & Hamlims TSMP Vogt & Wiig Wadia Gandhy Walkers Watson Farley & Williams Weil, Gotshal & Manges WongPartnership

Value (US$m) 119 119 Undisc 400 Undisc 247 Undisc Undisc 62 247 3,900 62 7,000 1,800 239 1,500 750 62 40,000 23 23 546 683 Undisc Undisc 9,400 2,500 9,400 Undisc Undisc 6.5 34 683 23 203 Undisc 70 62 25,000 40,000 138 1,800 23 203 282 709 1,000 1,000 62 2,500 500 9,400 Undisc 7,000 500 139 229 111

Deal type Project finance Equity market Private equity M&A M&A M&A M&A M&A M&A M&A Equity market M&A Debt market Finance Corporate Debt market Debt market M&A Project finance Equity market Equity market Debt market Equity market Corporate Islamic finance M&A Equity market M&A M&A Corporate Corporate Equity market Equity market Equity market Equity market M&A M&A M&A Project finance Project finance M&A Finance Equity market Equity market Equity market M&A Project finance Project finance M&A Equity market Debt market M&A M&A Debt market Equity market M&A Corporate Equity market

Does your firm’s deal information appear in this table?

Please contact

www.legalbusinessonline.com

alb@keymedia.com.au

61 2 8437 4700

9

NEWS | analysis >>

Analysis >>

Asia’s IBs go international A financial crisis is never going to be great for investment banks, but this one has created unprecedented opportunity for those in Asia to accelerate expansion plans both within and beyond the region. Alice Yan investigates

B

anks based in Asia have no doubt suffered from the economic downturn, but relatively speaking they have lost less and recovered faster. Taking advantage of the weakened competition, the top Asian banks have not only consolidated their lead in the region but have begun expanding into Europe, the US and the Middle East.

Peter Siembab, head of Nomura’s IBD transaction legal for Asia (ex-Japan), said the big question will be whether banks expand through organic growth or acquisitions. “It all depends on firm strategy and the opportunities that are presented by the market,” he says.

The availability of attractive acquisition targets in the past two years has prompted a race among the growth banks to snap up these opportunities. Leading the trend is Japan-based investment bank Nomura.

It has sought to expand its presence within and beyond Asia through the purchase of Lehman Brothers’ assets throughout the Asia-Pacific and across

10

Europe and the Middle East.

Macquarie Bank isn’t far behind: the purchase of US boutique investment bank Fox-Pitt Kelton Cochran Cariona Waller in 2009 was its third acquisition in North America within six months.

And recently, Mitsubishi UFJ and Morgan Stanley are discussing merging their Japanese operations.

While Chinese and Indian banks (though on a lesser scale) have also jumped on the acquisition bandwagon, the frenzy has begun to recede as the global economy stabilises and targets become more expensive. Meanwhile,

Consolidation in the IB industry 2007-2009

• RBS, Fortis and Banco Santander acquire ABN AMRO (RBS advised by Linklaters, Shearman & Sterling; Dundas & Wilson)

Oct 07

some banks have stuck firmly to their strategy to grow organically. Generally speaking, organic growth is less risky and potentially less rewarding: growth is slower, especially in the short to medium term, and there is a risk of being overtaken by faster-moving competitors. But Standard Chartered, for example, has taken advantage of the changing competitive landscape in a different way. “Instead of entering into new markets in the region, it has built out new capabilities and practice areas where competition was previously more concentrated, says Ben • JPMorgan acquires Bear Stearns (JPMorgan advised by Wachtell, Lipton, Rosen & Katz and Bear Stearns advised by Skadden, Arps, Slate, Meagher & Flom; Cadwalader, Wickersham & Taft; Sullivan & Cromwell)

Mar 08 Asian Legal Business ISSUE 10.2

NEWS | analysis >>

Bowden, head of Standard Chartered’s legal team in South-East Asia” Prior to the crisis, the bank only had an occasional hand in the capital markets, but now it offers fully fledged investment banking services. Its acquisitions and organic growth initiatives have been funded largely by record-high and repeated share offerings.

Expansion prospects for main players The ‘bulge bracket’ in the investment banking industry has been dominated by the same big players for the past two decades. But consolidations and collapses over the past two years have drastically altered its composition. The status quo of the bulge bracket has now come under question, at least in Asia.

Major regional players like Nomura and Macquarie have gone toe-to-toe with the bulge bracket members still left standing in the region. But will these banks be able to compete with the bulge bracket in the UK, Middle East or US markets?

It might be safe to conclude they currently have a firm foothold in these markets. Nomura reported earlier this year that for the first time, it brought in more revenue from outside Japan than from within, signalling that its overseas acquisitions may be paying off. But once the initial publicityassisted growth loses steam, the longterm expansion prospects for these banks look less assured.

In an industry based on client loyalty, referrals and repeat business, it is easy to be sceptical about whether new entrants can win over long-standing clients of the established investment banks. Many of the established players have consolidated and integrated, and now pose even larger competitive challenges to the incumbent market players.

But new entrants may have an edge in a matured industry.

Nomura’s Siembab says that there is a real attraction in the market to the entrepreneurial spirit, and that Asian banks are less steeped in an established order and can offer clients a partnership with great flexibility towards particular client needs.

“Clients may want a change from the bureaucracy of the more established players,” he said “They may want to work with a nimbler, more adaptive organisation rather than [with] a supertanker.”

But even the most ambitious Asian banks have limited their growth aspirations for the US market to organic – with the exception of Macquarie. As the US banking

“Instead of entering new markets, [Nomura] has built out its operations to new segments of the market where competition was previously more concentrated” Peter Siembab, nomura

industry has always been tightly shut, it is a real challenge to break into the top-tier unless you have been there from the start.

In-house counsel roles change

Rapid developments in the financial industry have transformed the makeup and function of in-house legal departments in growing Asian banks.

During the financial crisis, the most obvious impact was redundancies, restructuring and integration. For those who stayed, Siembab says, day jobs became significantly more complex and multifaceted than before.

• Bank of America acquires Merrill Lynch (Bank of America advised by Wachtell, Lipton, Rosen & Katz and Merrill Lunch advised by Shearman & Sterling) • Barclays acquires Lehman Brothers’ US business (Barclays advised by Clifford Chance; Sullivan & Cromwell; Simpson Thacher & Bartlett; Cleary, Gottlieb, Steen & Hamilton; Stikeman Elliott) • Nomura acquires Lehman Brothers’ Asian business (Nomura advised by Skadden, Arps, Slate, Meagher & Flom; Osborne Clarke) • Lloyds acquires HBOS (Lloyds advised by Linklaters and HBOS advised by Allen & Overy) • Wells Fargo acquires Wachovia (Citigroup advised by Davis Polk & Wardwell and Wachovia advised by Sullivan & Cromwell)

Sep 08 www.legalbusinessonline.com

►► The investment banking industry’s bulge bracket The bulge bracket refers to the world’s largest, most established and profitable global investment banks. The term originated from a reference to the first investment banks which appeared on tombstones in relatively larger font, as if to ‘bulge’ out.

Prior to the financial crisis Post-GFC Bear Stearns Bank of America Citigroup Barclays Capital Credit Suisse Citi Deutsche Bank Credit Suisse Goldman Sachs Deutsche Bank J.P. Morgan Goldman Sachs Lehman Brothers JPMorgan Merrill Lynch Morgan Stanley Morgan Stanley UBS UBS Wells Fargo

“In-house counsels had to deal with the ordinary course of business of covering transactions,” he said. “But they also had to deal with legal and regulatory issues arising out of the financial crisis, shifting and evolving markets and changing personnel, both internally and among other banks.” Now that the market has stabilised, banks that have built up their businesses are correspondingly building up their legal and compliance teams.

Experienced in-house counsel will be in high demand. Bowden told ALB that banks have already started hiring to meet the demand from increasing business. “The pace of hiring in the market definitely seems to have picked up now. In general there are still plenty of good people out there, although we’re already seeing competition for talent in certain areas,” he said.

The role in-house lawyers play in these banks, as they expand in the recovering market, has also changed.

In-house counsel must refine existing infrastructure where the business has made acquisitions, or build it from scratch where the business has entered into new market segments.

• MUFG and Morgan Stanley merged their brokerage operations in Japan (Morgan Stanley advised by Wachtell, Lipton, Rosen & Katz and MUFG advised by Sullivan & Cromwell; Mori Hamada & Matsumoto)

Oct 08

• ANZ acquires Royal Bank of Scotland Asian assets (ANZ advised by De Brauw Blackstone Westbroek; Blake Dawson; Slaughter and May)

Aug 09 11

NEWS | analysis >>

Siembab said the main challenge for lawyers is that they must build out the sometimes complex infrastructure needed to support the business while it is operational.

“This may range from developing new policies, procedures and analysis to the nuts and bolts of reconfiguring an internal computer program,” he says.

And in-house counsel has yet another new responsibility: they will need to be at the forefront of understanding the significant and material changes in the regulatory framework of many countries that is expected to come out of the financial crisis.

Evidently the banks are now demanding much more of their in-house counsel. Legal teams are expected to juggle multiple tasks, including advising on growth and integration issues, building infrastructure, keeping upto-date with regulatory changes, and covering ordinary course transactions.

It follows that in-house counsel now play an increasingly significant role in the main business.

It will be interesting to see whether these banks will restructure legal departments to reflect this change.

Siembab says some may depart from the traditional method of having a separate legal department, and shift the legal function so that it is closer to and more integrated with the business.

Closer proximity and more direct interaction between the legal and business aspects of companies may also increase the control and oversight of the business, facilitating more efficient interaction in executing a transaction.

“There is a real difference between a lawyer and banker sitting at the same desk and a legal department that is a twenty-minute bus ride from the main business,” noted Siembab. ALB

Analysis >>

Climate change:

legal lessons from Copenhagen

►► Recent capital raisings by Asian IBs

Mitsubishi UFJ: Raised US$4.3bn in January 2009 and US$12.1bn in December 2009 Nomura: Raised US$3.3bn in March 2009 and raised over US$5.6bn in September 2009 HSBC: Raised US$17.5bn in 009 Sumitomo (SMFG): Raised US$9.7bn in January 2009 Mizuho: Raised US$8.3bn in 2009 Standard Chartered Bank: Raised US$408m in October 2009 Bank of China: Currently considering capital raising for around US$3.7bn

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Climate change is a reality and savvy law firms are developing expertise to stay ahead of the curve. ALB investigates the evolution of the climate change practice Asian Legal Business ISSUE 10.2

NEWS | analysis >>

C

openhagen was host to the United Nations Climate Change Conference (COP15) last December, and beyond the throngs of protestors calling for immediate action to reduce greenhouse gas emissions laid a battle between the world’s nations.

The tension between developed and developing nations was clear as emerging economies, such as China, displayed their growing influence on international negotiations. Reaching agreement between 193 countries was never going to be easy and in the end the Copenhagen Accord was developed as a high-level statement of intention, rather than a binding agreement. However, such compromise should not necessarily be viewed as a climatic failure.

COP15 highlighted the immediate reality of climate change and demonstrated the willingness of international members to come together to enact a global solution. “It’s a minor breakthrough in the international climate-change regime,” says Paul Curnow, a partner at Baker & McKenzie.

“It is, of course, a non-binding agreement but governments don’t make political statements in an international forum without thinking that they are going to do something to try and stick to that.”

While there may not yet be certainty about the Copenhagen Accord and its application at a national level, the issue is one which will only Paul Curnow intensify as time passes. Baker & McKenzie Business is already feeling the pressure to operate in an environmentally sustainable manner, and many businesses are developing their operations with this in mind.

“It is business-driven not regulationdriven at the moment,” says Susan de Silva, a partner at ATMD Bird & Bird. “At the end of the day it is about businesses being competitive and responsive to customers’ demands that [they] are environmentally conscious.”

Practicing climate change

Climate change can cut across a number of legal disciplines, from litigation to www.legalbusinessonline.com

project finance and IP. Many different clients require climate-change advice, hence the vast potential of this practice group. The commercial opportunities created by Ying climate change initiatives Ding Norton Rose have translated into opportunities for legal work – and climate-change practices are emerging in law firms as clients demand new information.

“The clients in that particular space will want their legal advisors to have

the regulatory environment. They look for detailed advice on exactly what is going on and they expect us to be on top of it.”

However, the concept of a climatechange practice in firms is still relatively new in some jurisdictions. “There are only three international law firms with climate-change teams in China,” says Ding Ying, an associate at Norton Rose focusing on carbon finance and renewable energy projects in China. “We are really taking advantage of being able to advise clients on [these] issues.”

Although China and India capture a

“At the end of the day it is about businesses being competitive and responsive to customers’ demand that businesses are environmentally conscious” Susan de Silva, partner, ATMD Bird & Bird

good domain knowledge, just like in any other industry sector that you specialise in. It’s not just about the law, it’s also about a good understanding of the business of the client in that domain,” says de Silva.

Larger international firms such as Baker & McKenzie and Norton Rose have well-established climate-change practices, comprising lawyers who have developed expertise in both global and regional climate-change policies and regulatory matters.

It is this expertise which adds value when clientele are looking to make investments in clean technology, renewable energy projects or the carbon market.

“What really counts is legal certainty to make investment decisions,” says Tim Baines, an associate at Norton Rose. “There are only a few law firms that have a really dedicated international climate-change practice.

For our clients that are particularly focused in Tim Baines this area and do a lot Norton Rose of carbon trading, it is essential for them to keep abreast of

lot of attention on the world stage there is also a growing interest in renewable energy projects in South-East Asia.

“There is a lot of potential that has not yet been tapped,” says Bakers’ Curnow.

“Many countries like Thailand and the Philippines are establishing attractive regulatory frameworks, so there is a real focus in these countries. “It is not just in terms of wind and solar projects but also waste-to-energy, bio-mass and bio-energy. Renewable energy is certainly going to be the focus of my practice this year,” he said.

Climate change represents a growing market for legal services, particularly in Asia. Full-service law firms will inevitably need to address their capabilities in this area if they want to keep up with their competitors. “Climate change is an issue which is affecting a lot of clients,” says Curnow. “Even if there are law firms which are not as proactive as Bakers in developing a climate change practice they will be forced to respond to this issue because their clients will come to them [for answers]. ” “Our aim is to make sure that we continue be at the front, picking up new clients who have those sorts of questions.” ALB 13

NEWS | analysis >>

Analysis >>

Aviation practices: cleared for takeoff

Whether they are cash-strapped or expanding, Asia’s aviation industry has proven to be a big source of work for the region’s law firms

The travel industry and especially the volatile aviation sector are undergoing profound changes. That’s why Asia’s first airline offering in nearly five years – Tiger’s successful issue – is a particularly important indicator of a tentative resurgence in the IPO market” ALBERTO COLLA, MINTER ELLISON

14

J

apan Airlines’ (JAL) bankruptcy filing, is one of the biggest corporate collapses in Japan’s history. Two of Japan’s leading law firms, Abe Ikubo & Katayama (AIK) and Nishimura & Asahi have been appointed as advisors to proceedings.

JAL has turned to a team of 17 lawyers at Nishimura & Asahi. The key person behind the restructuring will be AIK managing partner Eiji Katayama, who has been appointed as the legal trustee advising JAL’s bankruptcy arrangers, Enterprise Turnaround Initiative Corporation (ETIC).

Katayama will be responsible for conducting various tasks, in accordance with the country’s Corporate Reorganisation Act. Both firms are expected to work closely to resolve numerous issues from the restructuring plan, such as employment law obligations and JAL’s asset sales.

As the former state-owned airline is reportedly US$16bn in debt, to recoup some of its losses it will cut a third of its workforce and receive a cash injection from the Japanese government.

The restructuring is expected to take up to three years and is a highly politically charged event, especially after Japan’s Prime Minister Yukio Hatoyama’s statement: “the revival of Japan Airlines is deeply connected to the revival of the Japanese economy.” It is

also understood that another local firm, TMI Associates, was approached by a local politician last November, seeking advice on the possibility of pension cuts in the event of the airline’s bankruptcy.

Meanwhile, US law firms Hogan & Hartson and Jones Day are helping two competing airlines invest in JAL in order to gain access to Asia’s lucrative aviation market. Hogans is advising Delta Airlines and Jones Day is advising American Airlines – both airlines are proposing investments of more than US$1bn in JAL.

Alternate offerings

However, law firms are also looking to Asian low-cost carriers (LCCs) as one of the main drivers of aviation work in the region. Seven firms have now been retained for Singaporean airline Tiger Airways’ US$178m IPO, the first offering by an Asian LCC in five years.

Since its launch in 2004 the airline has grown steadily, and expects to use the proceeds to fund its expansion in Australia and South-East Asia. “There is a growing recognition of the role played by LCCs, especially in Asia,” said Stamford Law director Joo Khin Ng, who is advising Tiger Airways. “As more players get into the LCC arena, there will certainly be additional work and demand for the region's law firms.”

In Indonesia, low-cost carrier Lion Air Asian Legal Business ISSUE 10.2

NEWS | analysis >>

went on a spending spree in December, financing seven new aircraft valued at US$500m.

The transaction was the largest aircraft financing in Indonesia last year Joo Khin Ng and the first US ExportStamford Law Import Bank supported financing in Indonesia in twenty years.

A six-strong legal team from Stephenson Harwood’s Singapore and Paris offices advised Lion on tax and regulatory issues, as well as resolving financing requirements for the Export-Import Bank of the US. Another aviation player to watch is Lion Air’s fellow Indonesian carrier, Garuda – a full-service carrier. In January the airline successfully bought back US$45m of its floating rate notes due 2007. K&L Gates was the airline’s international counsel and Jakarta-based firm Wiriadinata & Saleh was local counsel, assisting with the restructuring and buyback of the notes.

The transaction effectively helps pave

www.legalbusinessonline.com

the way for the state-owned carrier to launch its much awaited IPO later this year. While K&L Gates’ lead partner on the deal, Singapore-based Kevin Murphy, did not confirm that his team would be leading on the offering, he said the transaction was important not only for the aviation industry but also his firm.

“Having the flag carrier in the largest South-East Asian country finalise its debt restructuring is critically important to the [aviation] sector,” he said. “I think the sector will be active for the foreseeable future and will be an important area for law firms to focus on.”

Lion Air may not leave Garuda to become the first airline listed on the local bourse – it is also expected to launch an IPO this year. That is something which Stamford Law’s Ng, a capital markets lawyer, has witnessed as a growing trend.

“In the last couple of years, we have seen increasing numbers of fund raising exercises and listings involving Asia's aviation industry – they are certainly fuelled by the growth in the [aviation] sector,” he said. “The Tiger

Airways IPO [is just one example] demonstrating the growing interest of both the institutional and retail investors in the aviation industry.”

Regulatory work

Stephenson Harwood’s aviation and regulatory team also advised AirAsia X (AAX), the new long-haul affiliate of Air Asia, on its obligations under the EU emissions trading system (EUETS) for the aviation industry, which applies to all aircraft flying in and out of Europe. The firm successfully secured the UK’s agreement to allow AAX to submit its monitoring and emission plans to the UK, which will save AAX millions of dollars a year.

Under the EU-ETS, an airline must submit a monitoring and emission plan to its allocated EU member state, in order to gain free allowances of CO2. As AAX only became operational last year, it had not been allocated an EU member state under the EU-ETS. Stephenson Harwood alerted the airline to the fact that it could potentially miss out on its

15

NEWS | analysis >>

share of free allowances for 2012. And if this were the case, AAX would need to buy credits from the carbon markets.

Non-EU airlines are allocated EU member states for EU-ETS regulation, on the basis of which European country the bulk of their flights go to, making the UK the regulating body or competent authority for AAX. A significant number of airlines had already been allocated to the UK, given the huge number of flights that go through Heathrow airport.

Resources were already stretched.

“It was quite an ordeal to try and get their attention in order to correct the oversight on the list [of allocations],” said Paul Ng, global head of aviation at Stephenson Harwood. Negotiations were further complicated by the fact that the Paul Ng regulations are new.

Stephenson “There is no precedent Harwood or clear process to follow in order to submit an amendment to the list,” said Ng. “We explored both legal avenues and commercial relationship avenues in order to get the attention of the UK Environment Agency.”

The team worked under pressure in order to successfully secure the UK’s agreement before submission deadlines.

This agreement enables AAX to plan future routes and flight capacity to Europe and avoid huge extra costs by obtaining the free allowances.

Stephenson Harwood also assumed the role of project manager and worked with environmental and engineering company Entec to provide legal and technical expertise. “As legal counsel, we are very clear on our responsibilities, but often clients come to us for more than legal advice and we want to facilitate the process with them,” said Ng. “The lawyer-client relationship is one of trust. Not uncommonly, we are asked to take a project management role with other consultants.”

The regulatory team at Stephenson Harwood also advises clients and nations such as China and Indonesia on the Cape Town Convention, an international treaty designed to facilitate asset-based financing and leasing of aviation equipment. ALB 16

Analysis >>

High Court decision toughens passage to India for foreigners

A landmark decision recently handed down by the High Court constitutes a setback for foreign law firms looking to enter India

J

ust over a week before the 2009 Christmas holidays started, a 15-year long case on the future of foreign law firms in India was reaching its finale. But the judgment handed down by the Bombay High Court on 16 December certainly crushed any seasonal cheer. Law firms in the west who were hoping it would forge a path towards liberalisation of the legal market were badly disappointed.

The case centered on whether the Reserve Bank of India (RBI) was right in granting permission in the early 1990s to three foreign firms – White & Case, Ashurst and Chadbourne & Parke – to set up liaison offices there.

These offices were allowed to act as a base for largely non-litigious work; to foster communication between the firm’s international offices, local clients and government bodies; and to collect information and promote foreign investments, as well as for “technical and financial collaborations in India with clients and prospective clients”.

However, according to the group who challenged the decision, the Mumbaibased Lawyers Collective, the RBI should not have permitted the offices.

The group said law is not a trade or business like the RBI’s other industry

grantees. They also argued that even though the firms weren’t advising on litigious matters, the practice of law also constitutes non-litigious work – their ‘liaison’ activities.

They contended that in order to continue carrying out ‘liaison’ activities, foreign law firms must be

“This is quite a landmark judgment. It’s going to have a significant impact on the opening up of the legal services sector in the country” aparajit bhattacharya, hemant sahai associates enrolled under the country’s Advocates Act; the three firms granted permission to practice in India were not enrolled.

“This is quite a landmark judgment,” said Aparajit Bhattacharya, partner at Delhi-based Hemant Sahai Associates.

“It’s going to have a significant impact on the opening up of the legal services sector.”

While the decision in favour of the Lawyers Collective was not Asian Legal Business ISSUE 10.2

NEWS | analysis >>

“The underlying philosophy [of the decision] objecting to the setting up of liaison offices by foreign law firms would presumably also apply to entering into ‘best-friend’ relationships” aparajit bhattacharya, hemant sahai associates

groundbreaking, it did help reinforce the Indian legal fraternity’s opposition to international law firms. It also clarified certain issues surrounding India’s legal market liberalisation plans.

Clearly, foreign firms “cannot carry on non-litigious practice in India, which includes drafting of applications, consultancy work or any legal work that does not involve appearing before the courts, unless they abide by the Advocates Act,” Bhattacharya said.

The decision led the High Court to urge the government to make a formal decree on liberalisation. “[The government must] make appropriate decisions in the matter relating to foreign law firms practising the profession of law in India as expeditiously as possible,” it said.

Setbacks

It’s two steps forward and three steps back as more issues are being raised by the judgment’s implications. Firstly, the judgment had many questioning the legitimacy of foreign firms’ establishing ‘best-friends’ status with local Indian firms. Clifford Chance, Allen & Overy, Linklaters and Clyde & Co all enjoy ‘best-friend’ agreements with AZB & Partners, Trilegal, Talwar www.legalbusinessonline.com

Thakore & Associates and ALMT Legal respectively.

Many local lawyers feel that foreign ‘best-friend’ firms effectively have an avenue to bypass the prohibitions of having liaison offices. But are foreign firms falling under the definition of having liaison offices? According to a partner at one Indian ‘best-friends’ firm (who did not wish to be named) this is not the case. “Our foreign ‘bestfriend’ partner was never practising local law,” he said.

“This is a relationship fully compliant with the law, and the High Court decision doesn’t change anything.” Yet that is no consolation to locals still suspicious of the internal workings of these relationships, since there is no official monitor on whether the firms involved are sharing more than just referrals.

“These relationships could well come under scrutiny,” said Bhattacharya.

“While ‘best-friends’ relations would not fall within the ambit of a liaison office per se, the underlying philosophy [of the decision] objecting to the setting up of liaison offices by foreign law firms would presumably also apply to entering into ‘best friends’ relationships. It could also be argued that [these] relationships are more like referral arrangements, and don’t mean that foreign law firms are practising in India or have an office there.”

The larger issue the case has highlighted is the potential for ‘bestfriend’ firms to share financial systems, but as Bhattacharya says, there’s no way of finding this out. “It’s basically an internal thing – documents aren’t filed with a public office,” he explained.

“If it’s a relationship where profits and losses are being shared and they’re actually funding the operation of an Indian law firm, there’s obviously an issue. The High Court decision would have an impact on those kinds of operations, because technically that

foreign law firm is operating out of India.”

There’s also another way to potentially circumvent regulations, by sending lawyers on secondments.

A recent poll by the Indian legal trade magazine Bar & Bench, 46% of respondents said that ‘best-friend’ firms sending partners to India are gaining access to the legal sector and bypassing restrictions, compared to 14% who felt it was simply part of the “non-monetary exchange of skills”.

Market sentiment could be explained by recent strategies adopted by foreign firms. For example, Linklaters recently made headlines after two partners quit the firm to join their Indian best friend, Talwar Thakore & Associates.

And Allen & Overy sent Singapore capital markets partner Srinivas Parthasarathy to Trilegal.

While this is common practice, secondments of foreign lawyers happen “across the board” in the Indian legal industry and the firm itself brings in secondments “occasionally.” The issue isn’t that lawyers are coming into India but whether they are advising on local laws – even those lawyers coming in on a fly-in, fly-out basis.

“The foreign lawyers here cannot sign off on an Indian opinion, and so long as they have a work permit on a limited business visa and not have any income generated here, they don’t get a tax status so it’s technically not official. There’s nothing stopping them [from doing that],” said Bhattacharya.

Yet the recent decision hasn’t clarified whether a foreign law firm can set up an office with lawyers admitted to the Indian bar. It’s no surprise that resourceful law firms would want to find as many avenues as possible to get into the world’s second-fastest growing major economy. Recent setbacks caused by the High Court decision aside, there is no doubt that 2010 will be a year of seeing more ‘best-friend’ agreements, secondments and transfers. ALB 17

NEWS >>

beijing >>

Nishimura to open

uk report Clyde & Co, Shadbolt join forces Eight partners have joined Clyde & Co as a merger with construction boutique Shadbolt is finalised, bringing the total number of global partners in the company to 173. Most of the moves have been from Shadbolt’s London office.

Clyde & Co claim that the merger with Shadbolt will give them a contractual side to their existing construction practice, at the same time giving Shadbolt access to its offices across the Middle East, Asia, The Americas, Europe and Russia.

Links struggles to hold onto young blood Linklaters’ retention rate for its current trainees has dropped to 76%, with 47 of the latest batch of 62 applicants kept on for newly-qualified roles. The retention rate was at its peak near the end of 2008 – 94% opted to stay, but then fell through 2009 to 82% last September.

Mishcon de Reya targets fraud work with New York office London’s Mishcon de Reya has opened an office in New York with the former founding partner of Sheppard Mullin’s New York office, James McGuire. McGuire will be the office’s managing partner overseeing a team of 15. The firm’s New York posting will mark its first foray outside the UK and is aimed at providing “a Rolls-Royce litigation service,” said the firm’s managing

partner, Kevin Gold, targeting the growth in litigation work caused by the rise in fraud cases during the financial crisis.

End of an era as IP specialist leaves CC Baker Botts has taken Clifford Chance’s last dedicated intellectual property litigator, with Peter Taylor becoming its eighth London partner late last year. Clifford Chance has only one full time IP partner, and a further blow to its IP practice came after Mars, one of CC’s biggest clients, opted to instruct Lovells last year.

K&L Gates opens in Moscow After joining the billion-dollar club by breaking the US$1bn mark in global revenues (see US column on pg 20), K&L Gates is pushing into foreign markets by opening in Moscow. The firm has also opened in Tokyo (see page 27) on the back of its successful international expansion strategy last year, which saw launches in Singapore and Dubai.

The Moscow branch will be staffed by lawyers recruited from Haynes and Boone – including corporate partners Robert Langer and William Reichert who will lead a team of four other lawyers. “With our new Tokyo and Moscow offices, we will enter nations and parts of the world that are strategically important to K&L Gates’ global clientele,” said the firm’s chairman Peter Kalis.

J

apanese ‘big four’ firm Nishimura & Asahi is opening an office in Beijing this May and in anticipation has formed an alliance with mid-tier firm Soga, Uryu & Itoga (SUI) to target the Chinese market. SUI already has an office in Beijing.

The alliance is regarded as mutually beneficial – Nishimura will gain a wellestablished presence in China, SUI having been in Beijing since 2000. SUI on the other hand will broaden its international experience through Nishimura. “We’ve been working together in respect to anti-dumping matters initiated by the Chinese government Takashi Soga SUI against Japanese corporations for almost ten years, so we’re regarded very much as close friends,” said SUI’s managing partner, Takashi Soga.

Nishimura has also established an East Asia practice. Partner Saori Okada and an associate will be based in Beijing working on a ‘legally nonmiddle east >>

DLA’s Gulf D 

ROUNDUP • Offshore firm Appleby is launching an office in Guernsey this year, staffed with four lawyers recruited from rival firm Ozannes – Barney Lee, Helen Crossley, Jeremy Le Tissier and David Clark. Gavin Ferguson is the Londonbased banking partner being transferred to head the new office.

• Pillsbury partner Denis Petkovic has left to head Withers’ international finance and projects practice. At Pillsbury he led the Europe and Middle East practices.

• Withers is in expansion mode after announcing its intention to develop an international referral network. The firm is looking to establish connections and contacts around the world to boost the amount of cross-border work it captures.

• Reed Smith’s former UK head Tim Foster has quit, leaving for Birmingham-based Hill Hofstetter, which was originally established by former Reed Smith lawyers in 2008. He will join the firm’s corporate practice.

• French firm Racine has recruited the head of IP at rival firm Vaughan Avocats, Isabelle Renard.

• A team of former lawyers from Clifford Chance – Avi Amsellem, Anne-Hortense Joulie, Fabrice Cacoub and Michael Levy – have formed a new firm, Parisian boutique Lawington.

18

LA Piper cut an additional 9% from its Gulf staff in December, and there may be more to come.

The latest cuts affected seven lawyers and ten support staff from the real estate, construction, project finance, projects and support teams in Dubai.

The firm has already downsized twice in 2009 – in April eight Dubai associates from the corporate, finance and projects practices were made redundant and in June 22 staff members were let go. This means the firm has reduced its regional headcount by 39% year on year. Other measures that the firm has adopted in its restructuring efforts include staff sabbaticals and client secondments. A source said that some staff went on to three-day weeks, with full-time staff taking a 5% pay cut. Deteriorating Asian Legal Business ISSUE 10.2

NEWS >>

news in brief >>

in Beijing; finds China practice ally exclusive basis’ alongside three Beijingbased lawyers in SUI’s office and potentially with its Shanghai team.

Like other law firms around the world, Japanese firms are also looking to target the growing Chinese economy for an extra revenue stream, as Japanese companies broaden their operations in China. And Japanese law firms, competing with arguably better resourced international firms, may have an advantage up their sleeve.

“Japan and China share a close relationship – if Japanese companies go overseas they’ll usually use English as their governing language but in China it’s both Japanese and Chinese and that’s a field where Japanese law firms have an ‘advantage’ where we can

compete with [international] firms.”

SUI was formed in 2005 following a merger between Itoga-Soga and Cast Law and currently has 42 lawyers spread across three offices. Its China practice is principally focused on international trade, with foreign investment in China making up around 60% of its work. It is also hoping to broaden its practice to infrastructure work.

Although neither firm confirmed whether a future merger is on the cards, both China offices intend to work as independent firms. “We are not committed in a legal sense together but we’ll be closer friends more than ever,” said Sogo. “We haven’t started any talks of a merger or consolidation.”

Lee & Ko win two IP cases in December Korea’s Lee & Ko have successfully defended high-profile clients Samsung and Hyundai Welding in two separate IP cases last December. Lee & Ko’s litigation team, led by Jae Hoon Kim, Young Mo Kwon, and Hwan Sung Park, worked alongside IP firm Finnegan to defend Hyundai Welding after it was accused of patent infringement by Lincoln Electric Company. The infringement was alleged for Lincoln’s patent for bulk welding wire containers and components and welding wire.

The firm also represented Samsung after Transocean withdrew a patent infringement claim against Samsung Heavy Industries back in early 2007. After appealing Transocean withdraw its claim which means it cannot reintroduce the claim against Samsung again.

Anticipated company performance 2010 67

70 62 60 50 40 % 30 30 20 10 7 1 0 China

Excellent Good Average Poor

64

21 14

11

20

1

2

Hong Kong

Singapore

Source: The Hudson Report, Asia - Q1 2010

Merger hands Korea’s Hwang Mok Park new Shanghai office

redundancies: more to come? market conditions in the Middle East were cited as a reason behind the latest round of redundancies.

One of the firm’s key construction clients, Nakheel, has US$6bn in debt to repay and its owner, Dubai World, is itself undergoing a much-publicised restructuring. According to a source, DLA’s recruitment strategy over the last year may have been another reason for the firm’s restructuring. “Why, when the market was showing signs of slowing at the end of 2008, did DLA Piper Tony Holland continue on a hiring spree, DLA Piper bringing in more lawyers in 2009?” the source said. “There is a feeling that it’s not a geographical split, but a split between the favourite team www.legalbusinessonline.com

►► DLA Piper in the Middle East Office Abu Dhabi Dubai Doha Kuwait (JV) Muscat Riyadh (affiliation) Bahrain

Partners 7 23 2 1 1 1 (nonpartner) N/A

Opened 2008 2006 2008 2008 2009 2009 2009

and the rest. There was a group of people who came from the same firm who looked after their own, and there’s the rest.”

The latest staff losses may not be the last that will be seen at the firm. “I think there will be more cuts, but I am aware there were redundancies a few weeks before that and it would be interesting if they’ve been included in this [latest round of figures],” said the source.

Korean firm Hwang Mok Park’s (HMP) September 2009 merger with boutique firm Hanseung has helped it acquire a presence in Shanghai, with Hanseung’s twoyear-old Shanghai office now forming part of the newly merged firm. The new office extends HMP’s presence beyond Korea for the first time. Currently it is staffed with three partners, including office head Young Gyu Kim, but the firm plans to build up the practice further.

Park said that HMP has formed relationships with PRC firms (especially Jun He) through its membership of the Lex Mundi network. “We’ve worked with [Jun He] on many cases and, although we don’t have any official alliances, we’ve noticed that through the network we’ve gained a lot of referrals from other member firms.”

►► Hwang Mok Park : the numbers Total lawyers & partners:

Lawyers

Partners

Managing partners

111

65

46

5

19

NEWS >>

malaysia >>

Malaysia’s Azmi &

us report K&L Gates trumps Pillsbury and Paul Weiss in revenue results Pillsbury Winthrop, Paul Weiss and K&L Gates have revealed their revenue results for 2009. Pillsbury and Paul Weiss reported revenue decline. Pillsbury’s revenues fell by 7.5%, from 2008’s US$576m to 2009’s US$533m. The firm’s PEP also fell, by 2.6% to US$950,000, but it managed to keep revenues-per-lawyer flat at US$850,000.

Paul Weiss also revealed its provisional revenues, with mixed results. It is understood that while the firm’s 2009 revenues fell by 2% to US$678m, PEP was slightly up, from US$2.65m to US$$2.69m.

K&L Gates bucked the trend by breaking the US$1bn revenue barrier, for the first time, by US$300,000 – a 7.8% increase on the firm’s 2008 figure of US$959m. PEP also grew slightly, from US$855,000 to US$860,000.

Winston & Strawn launches alternative fees Many firms have been considering alternative fee arrangements (AFAs), but Winston & Strawn has actually formed a new software program to encourage its lawyers to offer more flexible fee options to clients.

The program is modelled on fee services the firm has offered in the last three years. Lawyers will be able to find out what fees to offer based on those past billing arrangements, measured on the types of work and services provided.

Since launching the program the proportion of clients opting for AFAs has grown by 15%, according to the firm. “I expect [that] to continue and would



A

be surprised if we don’t get up to around 40%,” said partner Scott Farrell.

New site rates firms on value The world’s largest organisation of in-house lawyers, the Association of Corporate Counsel, has launched a new law firm ratings service, based on a quality valuation of their service and fees.

The program, “ACC Value Challenge”, is based on evaluations submitted by ACC’s members. Members rate firms using a five-point scale – one for ‘poor’ through to five for ‘excellent’ – on criteria such as the firm’s legal expertise, communication skills, cost/ budgeting skills and efficiency.

The aim of the program, according to ACC president Fred Krebs, is to generate discussion about firms’ business models. Despite some criticism he says the program will simply formalise an evaluation process that in-house lawyers already conduct among themselves.

Mayer Brown partner on fraud charges Former Mayer Brown partner Joseph Collins was recently sentenced to seven years in jail for fraud relating to the collapsed brokerage firm, Refco. Collins was the head of Mayer Brown’s derivatives group before he resigned last year and was convicted of conspiracy to commit securities fraud in a US court.

Although the court heard that Collins did not personally profit from the US$2.4bn securities fraud, the judge said his actions were brought about by being too loyal. Collins is appealing his conviction.

ROUNDUP • Latham & Watkins has become one of the first firms to reverse salary freezes that were implemented by law firms worldwide in response to the financial crisis. The firm commenced its salary freeze in December 2008, among a number of other cost-cutting exercises including job cuts.

• Latham & Watkins lost a well-known M&A partner to Greenberg Traurig. David Schwartzbaum, who headed up billion-dollar deals for the firm like the Gilead-CV Therapeutics and the Texas Pacific-Axcan Pharma acquisitions, has joined Greenberg’s New York office.

• Arnold & Porter has scored a major coup, bringing in a four-lawyer team from Milbank Tweed to its London IP practice. Former Milbank partner David Perkins brought three lawyers with him to the firm, leaving only one partner at Milbank’s London litigation practice.

• Arnold & Porter is also celebrating alongside Dewey & LeBoeuf, Gibson Dunn & Crutcher and Clifford Chance, after the board of Cadbury approved its proposed takeover by Kraft. The firms were involved with the regulatory side as well as the commercial and securitisation legal issues. The US$19bn worldwide deal also reeled in Freehills, Shearman & Sterling, Slaughter and May, and Cleary Gottlieb.

20

zmi & Associates is targeting Chinese clients investing in Malaysia by launching a new Chinese-language website and a Chinadesk service for Chinese-speaking organisations.

Chinadesk focuses on providing crossborder legal services by creating a team of lawyers with language capabilities encompassing Mandarin, Cantonese and Hokkien as well as English.

The Chinese-language Jeffrey Tan website was created to Azmi & Associates demonstrate the firm’s Australia >>

Zaid Ibrahim becomes

M

alaysian firm Zaid Ibrahim is breaking into the Australian market with dual launches in Sydney and Melbourne planned for 2010, making it the first Asian law firm in Australia.

The launch is part of the firm’s aim to target the burgeoning US$1trn Islamic finance industry, although the firm will only advise on foreign Dr Nik Norzrul laws, not Australian Thani Zaid Ibrahim laws. “We decided to expand our presence to Australia in view of the tremendous interest in Islamic finance and Shariah-compliant advisory services,” said firm chairman Dato’ Dr Nik Norzrul Thani.

Thani added that his firm witnessed growing Australian interest in Islamic finance products firsthand when a team of lawyers visited Melbourne and Sydney early in December 2009 to promote Shariah finance, part of a delegation of officials including those from Malaysia’s central bank, Bank Negara. “We personally saw the tremendous interest from Australian businesses during the MIFC and Austrade road show,” said Thani.

Zaid Ibrahim’s launch comes as both the Malaysian and Australian governments expect cross-border investments between the countries Asian Legal Business ISSUE 10.2

NEWS >>

Associates targets China understanding of Chinese culture. The colours used on the website, for example, are those associated with prosperity and longevity in Chinese culture. The Chinadesk team will cover energy, mining, infrastructure and technology as these are the areas in which Chinese companies tend to invest in Malaysia.

“What we noticed from the market is that most law firms in Malaysia don’t provide any services in Chinese, so there was no one who could actually assist Chinese-speaking organisations,” said partner Jeffrey Tan. “That was actually the start of our plan to have a

dedicated team catering to the needs and requirements of Chinese-speaking organisations.” The firm hopes to use this as a precursor to having a physical presence in China.

“The next step will be to have an office in China for all these Chinese organisations,” said Tan. “I would say that it should happen within the next year or rather by next year… I think this is also in line with the approach and strategy of our firm – we usually tend to work fast.” However, plans are currently only in their initial stages. The firm also plans to open an office in Singapore. ALB

first Asian law firm in Australia

news in brief >> HKSE approves listing of BVIincorporated companies BVI-incorporated companies are now able to list on the HKSE, with the approval expected to attract more companies for incorporation in the BVI. It will also reduce the cost of pre-IPO restructuring to change the jurisdiction of the holding company.

“By jurisdiction, BVI companies provide the second-largest source of foreign investment in China, at US$5.8bn in the year to June 2009,” said Barry Mitchell, partner at Maples and Calder.

“This latest development could encourage more investment in Barry Mitchell Maples and China through BVI companies, as Calder the option of an exit through an IPO is now available.”

Maples pushed the matter ahead by submitting an application to the HKSE for in-principle recognition of BVI as a jurisdiction for listing purposes. It also assisted the HKSE in its review of BVI shareholder protection standards, which is a necessary precondition to obtaining such recognition.

Herbies launches Saudi finance practice Herbert Smith will launch a finance practice in Saudi Arabia — the world’s largest market for Shariahcompliant products — following the relocation of Adil Hussain, a senior associate in its Dubai office, to Riyadh.

Hussain, who will join the firm’s Saudi alliance partner Al-Ghazzawi Professional Association, joined the firm in November 2009 after a stint in-house at UK-based shariah-compliant Gatehouse Bank.

Hussain’s move means that Herbert Smith will soon have two partners based full-time in its Riyadh office.

Christopher Rees, co-head of the firm’s TMT practice, will link up with Hussain in March.

to increase. This is due to recent developments such as: the ASEANAustralian-New Zealand Free Trade Agreement (AANZFTA); Malaysia’s efforts to simplify foreign investment ownership laws for its financial services sector; and the Australian government’s intention to develop its local Islamic finance sector.

Zaid Ibrahim’s Dubai office, launched in 2008, is presumed to be another key reason behind the dual launch in Australia, since the Malaysian firm is also tapping the market for Middle East investments into Australia. “As the Australian government looks at attracting more investments from the Middle East for its major infrastructure projects, through our Dubai office and regional network in Asia, [we will] play a role as a bridge www.legalbusinessonline.com

to facilitate these investments,” Thani added.

While office managing partners and an official launch date have yet to be announced, it is understood that the firm’s partner Lim Kar Han, who is admitted to practice in NSW and obtained his dual economics/law degree from the University of Sydney, will spearhead the two launches from Kuala Lumpur. He will build critical mass by initially transferring lawyers to the new offices.

“We have 160 lawyers to cherry-pick from, but as we evolve and grow we will evaluate the market demands,” said Thani. “Our physical presence on the ground provides us with the option to engage local talent when the need arises within the middle and long-term time frame.” ALB

Maalouf Ashford opens in Saudi Arabia US-based firm Maalouf Ashford & Talbot has opened in Saudi Arabia after establishing an association with Saudi-admitted Dr Mohammed Al-Sunbusi, who will anchor the office.

The 20-lawyer firm, which has offices in New York, London, Hong Kong, Shanghai and Boston, will advise on international trade & finance matters involving the Middle-East, including oil & gas transactions, international securities offerings, project finance, M&A and international banking matters.

The move makes Maalouf Ashford, by ALB’s count, the 20th international firm to enter the lucrative Saudi legal market.

21

NEWS >>

Update >>

china >>

Energy & Resources Singapore commits to carbon reduction target by 2020 – implications for industry sector

O

n 11 January 2010, Singapore’s Minister for the Environment stated that Singapore will implement energy efficiency measures as announced in the “Sustainable Singapore Blueprint” in April 2009 to reduce carbon emissions by between 7% to 11% from business-as-usual (BAU) levels by 2020.

Singapore had earlier announced a commitment to reduce Singapore’s greenhouse gas emissions by 16% from BAU levels by 2020, contingent upon a global agreement being reached at the Copenhagen Climate Change Conference for significant targets for carbon emissions cuts.

Although the Copenhagen Conference did not result in specific targets for carbon emissions reduction, Singapore will proceed with national initiatives to step up its performance beyond current “Clean and Green” levels.

When global agreement on climate change is reached, Singapore will implement additional measures to achieve the full 16% reduction below BAU in 2020.

The Blueprint identifies the industry sector as accounting for more than half of the total national energy consumption. The Blueprint points out the environmental and business spinoffs of energy efficiency gains since energy efficiency should improve the cost competitiveness of industries, particularly of the energy-intensive producers such as the refinery, petrochemical, electronics and pharmaceutical industries.

The energy efficiency measures identified in the Blueprint which involve industries, and which are likely to be regulation-based, include: • the implementation of an Energy Management System (EMS) to help companies integrate energy efficiency into management practices, and the appointment of trained Energy Managers in-house.

• minimum energy efficiency standards for major energyconsuming equipment and systems.

• green data centre standards, guidelines and practices to reduce power consumption of Data centres, server rooms and IT equipment.

• “Green Mark” ratings for new and existing buildings to certify that they have been built to energy and resource efficient standards.

• energy priced to reflect the environmental impact of energy-production, to encourage conservation.

These and the other measures in the Sustainable Singapore Blueprint were motivated by the imperative of sustaining Singapore’s economic and environmental objectives in the face of scarce land, water and energy resources and population density, and the threat of climate change on the small island state.

Singapore can be expected to achieve its carbon emission reduction targets in a phased, pragmatic way that will safeguard its twin objectives of economic and environmental sustainability.

Susan de Silva, Partner ATMD Bird & Bird LLP Phone +65 6428 9817 Email susan.desilva @twobirds.com

22

Susan de Silva

Latham & Watkins opens Beijing office L

atham & Watkins has opened an office in Beijing, its fifth office in Asia and third in Greater China.

The firm had to wait three years before realising its ambitions in Beijing, due to local David Miles licensing regulations. “This is an ambition Latham & Watkins we’ve had for some time in having offices in the three regional centres for our China practice. Beijing was an important component and now we’ve got it,” said Hong Kong partner David Miles, who also sits on the firm’s executive committee. “[Before] we opened in Shanghai five years ago we discussed which office, Beijing or Shanghai, should come first. For various client reasons we decided on Shanghai but it’s always been our ambition to have an office in Beijing.”

A number of partners and associates have transferred (or are transferring) to the Beijing office and the firm has recruited local associates. The lawyers advise on capital markets, cross-border M&A and corporate finance transactions. “It will be a transactional office initially and in the course of time it may develop into a much broader practice,” said Miles, who did not specify potential practices.

“There are various areas we’re thinking about and we’ll be looking at Beijing as we do with all our offices, along our idea of multidisciplinary offices.”

Lathams considers the growth potential of China and the Asia region as “immense”, and Miles said the firm will consider opening offices in jurisdictions that liberalise their legal markets. “At the moment we don’t have any further ambitions for Asian offices, but these are things we’re thinking about,” he said. “One of the constraints in Asia is that regulations in some countries mean international firms aren’t allowed but we’ll consider making a decision when those regulations and markets change.” ALB

►► US firms opening China offices July 2008 – November 2009 Firms Covington & Burling Dechert Loeb & Loeb Miller, Canfield, Paddock and Stone Morris Manning & Martin Kirkland & Ellis Winston & Strawn

Location Beijing Beijing Beijing Shanghai Beijing Shanghai Beijing/ Shanghai

Date July 08 August 08 October 08 October 08 April 09 September 09 November 09

Asian Legal Business ISSUE 10.2

NEWS >>

singapore >>

Singapore short in court: A-G to compete with law firms for talent

Update >>

Islamic Finance Options for Setting-up Business in Malaysia: Limited Company, a Representative Office or, a Branch Office? PART 2 Branch

I

n many ways the branch structure is very similar to that of the limited company, except in respect of liability. Both are allowed to earn income in Malaysia, and are subject to similar tax rules. In addition, the rules governing the activities of a branch are the same as the rules governing the activities of a foreign-held limited company.

However, the branch and the limited company structures differ fundamentally in relation to issue concerning liability.

For a limited company, liability arising from the actions of the business or its employees is generally limited to the Malaysian company only. The same is not true for a branch.

Malaysian law treats a branch as merely an extension of its head office overseas. When a multinational company establishes a branch, and the branch enters into the same contract to supply construction materials but subsequently fails to perform, the Malaysian purchaser could then sue the head office of the multinational directly.

Capital Requirement

The minimum paid-up capital of a company in Malaysia is RM2.00 only. This effectively means that the two (2) initial shareholders hold one (1) ordinary share each in the company. These shares may be transferred to any party as soon as the application to incorporate the company has been approved by the Companies Commission of Malaysia (“CCM”).

In contrast, a representative office and a regional office as well as branch office are not subject to any minimum capital requirement or any equity condition. However, every foreign company desiring to establish a place or to carry on business in Malaysia must register itself with the CCM pursuant to Part XI, Division 2 of the Companies Act 1965. As for representative office and a regional office, the incorporation must be completely funded from sources outside of Malaysia.

S

ingapore needs more public prosecutors in order to meet the state’s growing population, and law firms may be the source for that talent. The suggestion was made by Singapore’s Attorney-General, Walter Woon, in his speech on the opening of the nation’s legal year for 2010.

Woon said there will be more pressure on the department’s crime divisions as the country’s growing population results in more criminal cases. “Even if the rate of criminality remains constant at a low level, a higher population means more criminal cases in absolute terms,” he said. “An increase in the number of DPPs and APPs is vital if criminal cases are to be disposed of expeditiously. There is no point increasing the number of criminal courts and judges if there are not enough prosecutors to handle the cases. The present number of prosecutors cannot cope indefinitely with an increasing workload.”

The Attorney-General added that his department will compete with law firms for the top legal talent. “We will not be shy about competing… we do not intend to take all the good lawyers, but we are not going to let the private sector monopolise all the legal talent in town either,” he said.

“There are enough idealistic young lawyers who see the law as primarily concerned with justice. They are our natural catchment.” ALB

www.legalbusinessonline.com

Registration

A Malaysian branch of an overseas company is required to register with the CCM in Kuala Lumpur before commencing operations. In the event the branch is to be located outside Kuala Lumpur, such overseas company has the option to do the registration at the CCM in Kuala Lumpur or at the respective branch offices of CCM in other states.

Representative Office and Regional office The registration approval process can normally be completed within 4 weeks, provided that the application and all relevant documents are in order.

Despite the procedures mentioned above, investment into Malaysian market has become more investor-friendly than before since the country has adopted a liberal policy by allowing foreign investment to penetrate into Malaysia without strict rules, but treated on a case-to-case basis.

Note, however, that in addition to the above requirements, application of special licenses or registration is relevant based on the activities/business undertaken or to be undertaken by a person/ an entity. * This article provides only a general picture and is not intended as legal advise.

Professional legal and secretarial advice should be sought to establish a company in Malaysia. Give us a call or an e-mail and we will be happy to be of service.

Juhaida Mior Zulkifli, Associate Mergers & Acquisitions and New Venture Practice Group Azmi & Associates 14th Floor, Menara Keck Seng, 203 Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.

Phone: +603- 2118 5000 ext. 5064 Fax: +603- 2118 5111 E-mail: juhaida@azmilaw.com

Juhaida Mior Zulkifli

23

NEWS >>

Update >>

hong kong >>

Zhong Lun opens Hong Kong office

Intellectual Property

P

PCT and Patent Prosecution Highways

T

he Patent Corporation Treaty (PCT) has been a popular choice among patent applicants who wish to file patent applications in numerous countries as it allows patentees a single international patent application applicable to 141 countries. However, the application can only be granted by a local patent office after the international application enters the national phase in each country. Although the PCT application is examined by an International Search or Preliminary Examining Authority (ISA or IPEA) during the International Phase, most patent offices conduct their own examination during the national phase. Despite this, applicants choose the PCT as it reduces considerably the amount of time and money spent in filing a patent application in each country.

Since 2006, a new means to expedite patent applications has been introduced. Known as Patent Prosecution Highway (PPH), it is an agreement between two countries which allows the examination result of a patent application in the first country to be used for a corresponding application to obtain grant in the second country. By making use of one examination result in two countries, the PPH reduces duplication which saves time and money for applicants. PPHs have been set up between some of the major patent offices e.g. US Patent and Trademark Office, Japan Patent Office, UK Patent Office and European Patent Office.

Typically, an applicant who wishes to utilize both the PCT and PPH would resort to first filing a PCT international application and upon entering the national phase, use the examination result from the patent office in one country to request for use of the result in the second country linked by a PPH. On 29 January 2010, a pilot-PPH program will be launched between PCT and the US, Japan and European Patent Office (together known as “trilateral offices”). Under the program, the examination results established by any one of these offices in its capacity as an ISA or IPEA may be used in any of the other two offices. Applicants can now eliminate the step of having the international application examined by the local patent office before making a request under a PPH and directly use the examination results obtained during the international phase in the national phase of one of the offices. Ultimately, the applicant can save time and money under the pilot program.

With the growing number of PPHs being established between countries including Canada, Korea and Singapore, it will not be long before the PCT-PPH program is extended to all these countries if the pilot program proves to be a success.

Ron Awyong Patent Engineer Intellectual Property and Technology Group ATMD Bird & Bird LLP 2 Shenton Way #18-01, SGX Centre 1, Singapore 068804 Phone +65 6534 5266 Direct +65 6428 9432 Fax +65 6223 8762 Email ron.awyong@twobirds.com

24

Ron Awyong

RC firm Zhong Lun has opened a Hong Kong office, in the same building that King & Wood and Baker & McKenzie have as their Hong Kong address. The new office is the firm’s seventh location, and operates in association with local Hong Kong firm Roger Ho & Co. “We started planning to open an office in Hong Kong two years ago. We took the time to search for the most fitting associate Hong Kong firm, because it is a determining factor to our Hong Kong office’s success and ability to offer quality services,” said Zhang Xuebing, Zhong Lun’s managing partner who also serves as the president of the Beijing Lawyers Association.

Roger Ho & Co founder and managing partner Roger Ho will oversee Zhong Lun’s new Hong Kong operation, where six lawyers are currently stationed. Among them is partner Jiang Xiansheng, a foreign lawyer registered with the Law Society of Hong Kong. Zhang notes that Zhong Lun will follow in the footsteps of King & Wood and Jun He by merging with its Hong Kong association firm after the required three-year period to offer clients dual law capability (Hong Kong/PRC law).

“The trend is obvious that mainland companies are coming to Hong Kong to raise capital or to set up a base for overseas expansion on an even greater scale. The need for a firm to be able to offer both PRC and Hong Kong legal advice are enormous and far from being covered. I expect more PRC firms will follow suit to service this emerging segment,” said Zhang. He is confident that by riding the trend the office will be one of Zhong Lun’s fastest growing branches. ALB

“We took the time to search for the most fitting associate Hong Kong firm, because it is a determining factor to our office’s success and ability to offer quality services” zhang Xuebing, zhong lun

China >>

Shanghai novelist instructs Beijing

S

hanghai author Mian Mian has accused Google China of copyright infringement and has filed a lawsuit after Google scanned one of her books into its library. Beijing’s Yingke Law Firm has been instructed on the matter, with the author seeking damages of US$8,950 and a public apology from the search giant.

Filed last October and heard at the Haidian District Court in Beijing, Mian’s suit is the first civil lawsuit against the technology provider in China over the scanning of books into its web library. “Mian is the first Chinese writer who accuses Google of copyright in the name of herself, and the case could encourage more Chinese writers to get involved in copyright protection,” said Sun Jingwei, a partner at Yingke.

The matter comes months after China Written Works Asian Legal Business ISSUE 10.2

NEWS >>

Update >>

International Tax European governments agree data sharing but remain deadlocked over EU Savings Directive

E

►► Hong Kong offices of PRC firms Firm Chen & Co China Law Office Duan & Duan Grandall Guangdong Hua Fa Guangdong Xin Yang Guantao Jun He Jin Mao King & Wood Zhong Lun

Year opened 2006 n/a 2006 2008 2007 2006 2009 2006 2007 2006 2010

Associated firm n/a n/a Chan J & Lai Woo, Kwan, Lee & Lo* Ng & Shum n/a Jackson Woo & Associates* Wang & Co, XJ Wang and Chan Arculli Fong & Ng Roger Ho & Co

*Alliance firms

Yingke against Google Copyright Society called out to Chinese writers to stand up against Google’s digital library proposal. Earlier in France, a court ordered Google to pay US$430,000 to French publisher La Martinjere and to remove online extracts to books, a ruling that could set a precedent dealing a blow to Google’s digitising endeavours.

In 2005, a copyright infringement suit was filed against Google by US authors and publishers. Settlement was reached last year in which Google agreed to pay US$125m to resolve the claims. US firm WilmerHale has been Google’s long-term legal advisor, although who is advising Google on the latest case has not been disclosed. The firm followed its client into China to rovide on-the-ground legal advice regarding the search giant’s business there. ALB www.legalbusinessonline.com

U finance ministers have agreed to mandate the “spontaneous” exchange of banking information between member states.

The provisions for automatic data exchange will be introduced through amendment to EU Directive 76/308/EEC on mutual assistance in recovery of taxes. These are mainly aimed at stopping fraudsters organising insolvencies in member states where they have debts. Existing international provisions to fight this process have only allowed a small proportion of debts to be recovered, it said.

The amended Directive will be adopted at a forthcoming Ecofin meeting, once the European Parliament has approved it.

But the guarded communique issued after Ecofin’s meeting on 19 January indicated that member states have not yet agreed on one of the most controversial topics under negotiation: the extension of the EC Savings directive 2003/48/EC to cover trusts and other financial vehicles.

Nor was any firm announcement made or on the planned anti-fraud agreements with Liechtenstein, Andorra, Monaco, San Marino, and Switzerland.

Media reports after the meeting suggested that Luxembourg had somewhat softened its opposition to fullscale tax cooperation and that both Luxembourg and Austria are trying to retain their exemption from the existing Savings Directive’s information disclosure provisions.

Obama get tough on US tax cheats President Barack Obama is directing the US Office of Management and Budget and other federal agencies to keep contractors who are delinquent on their taxes from winning new contracts with the US government.

The president intends to sign a directive on the issue, a move the White House says is part of a broader effort to cut down on waste and ensure that tax cheats aren’t boosting their bottom lines at taxpayers’ expense.

“All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe—because it’s a fundamental responsibility of citizenship,” Mr. Obama said, according to prepared text released by the White House. “And yet, somehow, it’s become standard practice in Washington to give contracts to companies that don’t pay their taxes.”

Mr. Obama also directed the Internal Revenue Service to review the overall accuracy of firms’ claims about tax delinquency “to be sure that when a company says it’s paying taxes, it’s not lying.”

Mr. Obama asked for Congress’s help in the effort, urging lawmakers to pass legislation that lets the IRS share information about tax delinquency with contracting officials.

By Debbie Annells, Managing Director, AzureTax Ltd, Chartered Tax Advisers Suite 1010, 10/F Lippo Centre, Tower Two, 89 Queensway, Hong Kong www.azuretax.com, a member of AzureTax Group (Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370, (Fax) +852 2122 9209 Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.

Debbie Annells

25

NEWS >>

news in brief >>

middle east >>

Bahrain launches new arbitration centre Law firms in Bahrain will be able to use the country’s first international arbitration centre, after local legal community members and the Minister of Justice and Islamic Affairs marked its official launch in January.

Through the centre, Bahrain intends to capture the growing market for international ADR. The international centre will make Bahrain the first to have an arbitration ‘free-zone’ – meaning awards from international disputes will not be challenged here if the parties agree to the outcome. The centre will also take on cases from domestic courts involving claims over US$1.3m and international parties, or those licensed by the Central Bank of Bahrain.

“The Chamber is … a key aspect of Bahrain’s 2030 vision and national economic strategy,” said the Minister, Shaikh Khalid bin Ali Al Khalifa (pictured, second from left). “It will help develop the legal services sector offering here in the Kingdom, stimulate economic trade and further enhance Bahrain’s international business and legal credentials.”

HFW pushes Gulf strategy, hires Ince lawyer

H

olman Fenwick Willan has broadened its reach in the Middle East by establishing alliances in both Abu Dhabi and Saudi Arabia.

In Abu Dhabi, the firm has formed a ‘best-friends’ association with Salem Al Maddfa Advocates, while in Saudi Arabia it has linked up with Allazzam Law Office.

HFW’s commercial director James Huckle did not say whether the alliance in Abu Dhabi, where an association is not needed to form a presence, would be a precursor to a permanent office base.

“As a firm, we’ve been working in the Middle East region for many years and similarly [with] partners in our Dubai office,” he said.

“We’ve worked in Abu Dhabi and Saudi Arabia for a long time and have the experience of a number of lawyers

in those jurisdictions. In working with Allazzam and Salem Al Maddfa, we are able to work with firms that are a good fit for us in terms of our experience in the region and our business development objectives.”

To further pursue its Gulf strategy HFW gained a third Dubai partner in construction litigation lawyer Paul Suckling, from Ince & Co. This is in keeping with the firm’s history of building up its offices by recruiting talent from rival firms.

The Dubai office was launched in February 2006 after subsuming the local office of shipping boutique firm Hill Taylor Dickinson. And in Australia late last year HFW launched a second office in Sydney, hiring Blake Dawson partner Alex Baykitch to head up the operation. ALB

industry >>

Al Tamimi managing partner steps down Al Tamimi & Co has confirmed that the firm’s managing partner since 2005, Hoda Barakat, has stepped down from the role by retiring from the partnership. Although Bakarat handed her notice to the firm in December, her retirement was only made official by the firm last week.

She will remain as a consultant working on an ad hoc basis in the IP/IT practice, which she helped form after joining Al Tamimi 15 years ago. Her retirement ends months of speculation about her absence at the firm – in October last year Barakat was said to be on ‘extended leave’ after Housam Hurani, the firm’s head of banking & finance, was appointed interim managing partner.

Hurani has now officially assumed her position, having taken over the top job as of December 8. when do CEOs expect the economy to recover?

100% 80%

37%

38% 29%

60% 40%

15% 24%

36%

33% 35%

29% 29%

18%

31%

30%

28%

26%

21% 30% 22% 18% 27% 18% 13% 16% 0% 5% 3% 13% Western CEE North Asia Middle Africa Latin America Pacific East Europe America

20%

18%

21%

In 2011 In the second half of 2010

26

In the first half of 2010 Already recovered

Allen & Overy to boost female partnership A

►►Part-time equity partners at A&O: key facts

llen & Overy will introduce a new part-time working scheme in an effort to boost the number of female partners at the firm. The scheme allows equity partners to work a minimum of four days a week or be entitled to an extra 52 days of annual leave. When rolled out in May this year, partners will be able to take advantage of the scheme for up to eight years while retaining their equity status; they will be remunerated on a pro-rata basis, capped at 30 points (see table).

Although open to both male and female partners worldwide, the firm’s aim is to encourage more of its female lawyers to remain on the partnership track, said senior partner David Morley. “It’s no longer realistic to provide just one option and say ‘take it or leave it’. If you are going to make any real change you have to address the options available to people at all stages of their career – from associate through to equity partner – to help balance their professional and personal aspirations.

• Part-time partners can work either a minimum four day week, or take a maximum 52 days extra leave a year, for a period of up to eight years – three years as salaried or one point partner, five years as full equity on standard track.

• Compensation and contribution on a pro-rata basis.

• Reward capped at 30 points – equivalent to five years progress on standard equity track.

• Available to all partners globally in both feeearning and non fee-earning roles.

• Agreed by managing partner of their practice area.

Consideration will be given to impact on team, clients and number of partners working flexibly.

• Time limits: working as a one-point or salaried partner can be indefinite. As a full equity partner part-time is limited to five years, when it will be reviewed.

Source: Allen & Overy

“We don’t pretend this is a cureall but it’s a serious attempt to take positive steps and to send a strong signal of our intent to retain talent in our business,” he said. “I think this is a terrific step in the right direction [but] the glass ceiling is stronger here in Asia,” said Robert Sawhney, managing director of Hong Kongbased consultancy SRC Associates. ALB Asian Legal Business ISSUE 10.2

NEWS >>

japan >>

Update >>

IT column

TM

Information Technology Risk.

T

he key questions facing organizations, and IT professionals today, in terms of IT risk, are fast becoming overly complicated, and certainly at times, overstated. This has lead many organizations to simply ignore the issues, or “hope” their particular strategies, infrastructures, and security layers are sufficient.

Questions such as-

K&L Gates launches Tokyo office with partners from Latham & Watkins

K

&L Gates has opened offices in Tokyo and Moscow two offices in one month. Three new corporate partners – Ryan Dwyer, Takahiro Kawaguchi and Robert Melson – are joining the firm’s Tokyo office from Latham & Watkins, where they held the position of counsel. The office will initially focus on corporate and international finance, M&A, banking, PE, real-estate acquisitions, licensing and distribution arrangements and general corporate and employment law areas.

All three partners leaving Latham & Watkins were looking to establish their own presence in Japan. K&L Gates offered the partners a perfect fit in terms of its global network and practice areas. Melson, in particular, was also keen to develop his aircraft and equipment leasing practice, and K&L Gates has an established practice outside of Japan which offers Melson the opportunity to reach out to a global network.

“The Japanese leasing companies are located here in Japan but the European and US financial institutions involved in the Japanese operating lease market tend to have their aircraft finance people for the region based in Singapore, although many of those people have previously been based in Tokyo and I have strong ties with them,” said Melson.

“It makes sense to have me based part-time in Singapore and part-time in Tokyo so that we can develop the aircraft finance and leasing practice on a regional basis.”

The Tokyo partners are already busy with their existing clients and the team has already completed a refinancing of a mall in Japan by a European bank. K&L Gates will be making further moves to expand its presence in Tokyo and the partners are speaking with other partners, associates and legal assistants from various firms who have expressed an interest in joining their practice. “Our goal is to be a fullservice firm in Tokyo,” said Melson. ALB

www.legalbusinessonline.com

• Has your organization been the target of malware in the last 12 months (and are you sure?)

• Do you know exactly where sensitive data is located across your enterprise (Customer account information, personally identifiable Information etc) • Do you know if your user’s computers/servers (endpoints), are in a trusted state?

Recent surveys, on the Top 10 security threats to organizations in 2010 listed, Organized crime targeting financial institutions, additional malicious code or Malware being introduced into networks (in particular polymorphic malware, that can hide, be activated in various ways, once discovered can mutate, or morph to continue doing significant harm), increased insider/internal threats, or fraud, mobile banking threats, social media attacks and information stealing or altering, IP theft and espionage.

Whilst ironic, it has become apparent the need for specific and proven technology to detect and protect from the above threats is our only defense. The bulk of IT organizations, technology experts, and yes, legal opinions, have weighed in to this ever growing debate, only to see technology budgets slashed, and an approach of “ we have enough perimeter security to protect us”. If this were the case, why do we read daily, of major corporations suffering from these attacks?

Daily, and many!

There is a critical need to detect malicious activity that evades network monitoring technology, and perimeter defenses. Eg- Zero day events, polymorphic malware, hidden root-kits, and inadvertent or malicious insider threats.

There is also a need to triage for, identify, analyze, remediate and recover from, any threat to network end points. To quickly, expose unknown files, or processes, on end points, in order to maintain a trusted state.

EnCase Enterprise Cyber Security solution is the world wide leader in the fight against this most serious Information Technology Risk.

By Carl Kimball For more information, please contact: Carl Kimball, General Manager, Asia Pacific Guidance Software, Inc Phone: +65 6248 4527 Email: apac.sales@guidancesoftware.com

Carl Kimball

27

NEWS >>

news in brief >> US law firm suing China hit by cyber attack California-based law firm Gipson Hoffman & Pancione has been targeted in a spear-phishing cyber attack that originated in China. The firm is representing software company CYBERsitter in its US$2.2bn law suit against the People’s Republic of China (PRC), two Chinese software makers and seven computer manufacturers for using stolen code.

“They were e-mails targeted at individuals in our law firm that were made to appear as if they were coming from other individuals at our law firm,” a spokesperson said. “They attempted to get the target to click on a link or attachment.” The attack is said to have used the same technique as the one used against Google in China earlier this week.

White & Case launches Singapore arbitration practice White & Case has launched an international arbitration practice made up of two partners and two associates.

Aloke Ray, a partner from the firm’s London office, has been transferred to head the new practice in Singapore.

He is joined by Nandakumar Ponniya, a former partner at Rajah & Tann, and two associates, Matthew Shaw and Dian Chen.

The practice will work with the other Asia-based teams in China, Hong Kong and Japan, which number 20 disputes lawyers.

Although the arrival of this team highlights White & Case’s intentions to capitalise on the pick-up in economic activity and the region’s Aloke Ray potential for growth, the firm is still White & Case exercising caution in its expansion.

This makes sense considering the firm cut 3% of its workforce in November 2008 and then another 400 staff members in March last year. “We are already busy but the hope and the expectation is that, as we get busier, we will grow,” said Ray. French firm takes Gulf road less travelled French firm UGGC & Associés has opened an office in the UAE city of Ras Al Khaimah. The firm launched its first office in Doha last year and said the motivation for opening another was the Emirate’s recent initiatives to attract French companies.

“Ras Al Khaimah is an Emirate implementing an original growth policy, with the development of raw materials, industry in general, and tourism,” said partner Arnaud Depierrefeu. “In addition, the Emirate specifically aims to attract French companies.”

Depierrefeu will be in charge of both the Doha and Ras Al Khaimah offices, with UGGC aiming to service real estate, tourism and industrial plant development projects in the region. UGGC also has a key client in the region – RAK Ceramics, a worldwide ceramic tile-manufacturing company run by the crown prince of the Emirate.

28

appointments ►► LATERAL HIRES Name

Leaving

Going to

Practice

Location

Mark Cummings

Maples and Calder

Appleby

Corporate & commercial

Hong Kong

Amelia Hall

Allen & Overy

Appleby

Corporate & commercial

Hong Kong

Dennis Barsky

Singapore hedge fund

Jones Day

Private equity

Singapore

Michael Fosh

Herbert Smith

Reed Smith Richards Butler

Corporate & securities

Beijing

Peter Chen

O’Melveny & Myers

Shearman & Sterling

Corporate & commercial

Hong Kong

Colin Law

O’Melveny & Myers

Shearman & Sterling

Corporate & commercial

Hong Kong

Stephen Forster

Hassans

Al Tamimi & Co

Infrastructure and project finance

Abu Dhabi

Tara Marlow

Majid Al Futtaim

Al Tamimi & Coy

Property and hospitality

Abu Dhabi

Claire Grainger

DLA Piper

Agha & Shamsi

Projects and dispute resolution

Dubai

Nandakumar Ponniya

Rajah & Tann

White & Case

Intern. arbitration

Singapore

Christopher Tung

Mallesons

K&L Gates

Dispute resolution

Hong Kong Singapore

Michael Pollen

DLA Piper

K&L Gates

Dispute resolution

Nelson K. Ahn

Korea Financial Investment Assoc

Kim & Chang

Finance

Seoul

Sang Hyuk Park

Dechert

Kim & Chang

Corporate

Seoul

Niping Wu

Cleary Gottlieb Steen & Hamilton

Orrick

Corporate

Beijing

Yi Yi Wu

Rolmax

Minter Ellison

Corporate

Shanghai

Wan Li

Minter Ellison

DLA Piper

Corporate

Shanghai

Paul Suckling

Ince & Co

Holman Fenwick Willan

Litigation

Dubai

Ryan Dwyer, Takahiro Kawaguchi, Robert Melson

Latham & Watkins

K&L Gates

Corporate

Tokyo

Keith McGuire

Allen & Overy

Ashurst

Corporate

Singapore

Richard Tan

Lovells Lee & Lee

Stamford Law

Intern. arbitration

Singapore

Wendy Tan

KhattarWong

Stamford Law

Intern. arbitration

Singapore

Maxwell Fox

Paul Hastings

Ropes & Gray

IP

Tokyo

Dean Moroz

Vision Investment Management

Ashurst

Intern. investmt funds

Hong Kong

►► Relocations Firm

Partner

From

To

Freshfields

David Winfield, Ken Martin

London

Hong Kong

Herbert Smith

Adil Hussain,

Dubai

Riyadh

White & Case

Aloke Ray

London

Singapore

Orrick

Michael Haworth

Tokyo

Hong Kong

►► Promotions Name

Firm

Promotion

Practice

Location

Koichiro Ohashi, Simon Collins

White & Case

Partner

Global asset Finance

Tokyo

Iain Elder

Shearman & Sterling

Partner

Project development & finance

Abu Dhabi

Manoj Bhargavaa

Jones Day

Partner

Capital markets

Singapore

Hiromitsu Miyakawa

Jones Day

Partner

Anti-trust

Tokyo

Stuart Salt

Linklaters

Asia managing partner

Corporate

Hong Kong

Carol Hall

Walkers

Head of practice

Investment funds

Hong Kong

Yuet Ming Tham, Ernest Yang

DLA Piper

Partner

Asia litigation

Hong Kong

Asian Legal Business ISSUE 10.2

NEWS >>

Senior counsel

Various

Singapore: new year, new senior counsel Law firms WongPartnership ( Andre Maniam), Allen & Gledhill ( Stanley Chang), and Wee Tay & Lim ( George Jin) can now boast the addition of another senior counsel in their ranks. And the Attorney-General’s Chambers has gained female senior counsel, Jennifer Marie, who is the fifth senior counsel to be appointed.

Singapore first introduced the scheme in 1997 to recognise the country’s best advocates. Since its introduction, 58 senior counsels have been appointed and another five hold this appointment (ex officio).

Senior counsels are chosen by the Senior Counsel Selection Committee, comprising the Chief Justice Chan Sek Keong, the Attorney-General Professor Walter Woon and the Judges of Appeal. Nominees are required to demonstrate contributions to the law in the form of academic teaching, writing and research, and to the institutions of continuing legal education.

Freshfields

Hong Kong office

Freshfields boosts Asia office with transfers Freshfields has transferred two London-based partners to Hong Kong build up its corporate and capital markets practices. David Winfield will be moved to Hong Kong to head the firm’s Asia finance practice, while corporate partner Ken Martin will boost the Asia capital markets practice.

Jones Day

Jones Day boosts Asia partnerships Jones Day has reunited with former Singapore office partner Dennis Barsky, who rejoins the firm after a stint with a Singapore hedge fund. Barsky will be based in the firm’s private equity practice. The firm has also made two new Asia-based lawyers partners: Singapore capital markets lawyer Manoj Bhargavaa and Tokyo-based anti-trust specialist Hiromitsu Miyakawa.

Over the last three years Bhargavaa has closed more than 20 capital markets and private equity transactions in India, along with deals across Australia, China, Europe and the US. Miyakawa joined the firm as an associate in 2006 and has advised Japanese companies on anti-trust issues in foreign acquisitions

Herbert Smith

Reed Smith expands Beijing capital markets Reed Smith Richards Butler is preparing for a busy year in capital markets by boosting its capabilities with the hire of Michael Fosh, former chief representative of Herbert Smith’s Beijing operation. Fosh was with Herbert Smith for 17 years Michael Fosh but said he was drawn to Reed Smith due to the reputation of its Greater China capital markets practice.

Fosh’s ability to speak English, Mandarin and Cantonese should assist those Chinese clients seeking offshore listings as well as those interested in listing on the proposed international trading board on the Shanghai Stock Exchange. “I look forward to the opportunity to advise them on such a move from the Hong Kong listing compliance and legal aspects as and when the detailed regulations governing the listings on the new board are published,” he said.

DLA Piper, Mallesons

DLA Piper

Minters appoints replacement Shanghai head Minter Ellison’s Shanghai office managing partner Wan Li has defected to DLA Piper, where he will lead the firm’s corporate team. However Minters moved quickly to fill the vacancy and appointed Yi Yi Wu as its chief representative.

Wu rejoins Minters from Shanghai Rolmax after leaving the firm in 2006. Before working in Shanghai, Wan worked in Melbourne, Sydney and Hong Kong. The firm opened its Shanghai doors in 1999 and this Wan Li year will open an office in Beijing. www.legalbusinessonline.com

Piper’s Islamic and Saudi operations until late 2008, Grainger joined DLA from Clyde & Co just as Agha was departing. “Oliver knew my background and we had met briefly in the month when I started at the firm and before he had left,” said Grainger. “When the prospect of joining the firm occurred, I met the people and was impressed with the firm’s ... very ethical standing.”

Hassans

Al Tamimi & Co

Al Tamimi appoints new Abu Dhabi head Al Tamimi & Co has boosted its Abu Dhabi office through the appointment of a new head of office, partner and associate, raising the firm’s headcount by three. Corporate partner Stephen Foster joins the firm from Hassans, a Gibralter-based firm, and will lead the 24-lawyer Abu Dhabi team as the new head of office. He has previously advised on projects such as the London Underground PPP and is expected to develop the firm’s offerings in infrastructure projects in the Emirate.

Meanwhile, the firm’s associate ranks have also been boosted with the appointment of commercial lawyer Khaled Al Hayyas, from law firm Bu Jseem.

K&L Gates

K&L Gates builds up its Asia offices K&L Gates has hired dispute resolution partners Michael Pollen and Christopher Tung to build up its Asia operations.

Marine law specialist Pollen will join the firm’s Singapore office, Christopher Tung where he will link up with fellow DLA Piper alumnus and office head Kevin Murphy, who launched the firm’s Lion City office last March. Pollen will join a 15-strong team in Singapore and be advising on shipbuilding, ship sale and purchase, and offshore oil & gas transactions.

Tung joins the firm’s Hong Kong office after a decade-long career spent at Mallesons. His practice focuses on infrastructure disputes across Asia, specialising in the fast-growing area of climate change and environmental legal issues.

DLA Piper

Minters

Reed Smith

Alllen & Overy

Ashurst

Ashurst adds corporate expertise to boost Asia practice Ashurst has added another corporate partner to its ranks in Singapore. Keith McGuire joins the firm’s Singapore team from Allen & Overy, where he was head of the firm’s corporate department in Singapore Keith McGuire from 1998 to 2005. “Keith’s appointment and the recent hire of Peter Kwon in Hong Kong show that we are… making strategic investments in response both to client demand and market opportunities,” said Geoffrey Green, head of Asia at Ashurst. “There is a strong synergy between Keith’s expertise, particularly in the energy, infrastructure and financial services sectors, and the focus of our practice in the region.”

Agha & Shamsi

DLA Piper lawyer appointed projects/disputes head at Agha & Shamsi Shariah-compliant law firm Agha & Shamsi has appointed former DLA Piper lawyer Claire Grainger as partner to head its projects and dispute resolution practice. She joins the firm after spending two years as a consultant and director in the construction practice with DLA’s Dubai office, leaving the firm mid-last year. Grainger’s recent appointment underscores the value of networking in the region. Although Agha & Shamsi’s managing partner Claire Grainger Oliver Agha headed up DLA

CORRECTIONS #

Due to a production error the following sectors did not appear in the feature article entitled “2010: The Year Ahead” in ALB 10.1. They are available online at www.legalbusinessonline.com.

Korea: written by Yun Sai Ree, partner, Yulchon Vietnam: written by Dang The Duc, managing partner, Indochine Counsel Malaysia: written by Brian Chia, partner, Wong & Partners

ALB regrets these errors.

29

News | regional update >>

Regional updates

CHINA

30

CHINA

Paul Weiss

Philippines

SyCip Salazar Hernandez & Gatmaitan

SINGAPORE Loo & Partners

Vietnam

Indochine Counsel

MALAYSIA

Wong & Partners

Each month, ALB draws on its panel of country editors to bring readers up to date with regulatory developments across the region

Foreign-Invested Partnership – An Opportunity for Private Equity Funds in China?

Since the issuance of the Partnership Enterprise Law in 2007, the long-awaited implementing regulations on foreigninvested partnerships were finally promulgated on November 25, 2009 and will become effective on March 1, 2010.

Pursuant to the Administrative Measures on the Establishment of Partnership Enterprises

by Foreign Enterprises or Individuals (the “Measures”), foreign investors will be able to create limited and unlimited partnerships in China either with other foreign investors or with Chinese investors.

Moreover, foreign investors can also join an existing domestic partnership by making new contributions to such partnership or acquiring the existing interests of the partnership from the partners.

The Measures break new ground in another respect as well: apart from representative offices, foreign-invested partnerships will be the only foreigninvested entity that can be established without prior approval by the Ministry of Commerce (the “MOFCOM”) or its local counterparts. The representative or agent of the partners can directly apply to the administration bureau of industry and commerce (the “AIC”) for registration. In addition to the documents required for the registration of all partnerships, the partners applying to register a foreigninvested partnership must also submit an explanation of its compliance with foreign investment industrial policies. If regulatory approval is required for the proposed business of the partnership, this approval must be obtained before AIC registration.

However, it remains unclear whether foreign-invested private equity funds may be established under the Measures.

According to the official announcement of the Measures made by the State Council,

the relevant ministries still have different views on the regulatory approach to foreign investments in private equity funds in China. The Measures only provide that special rules on foreign-invested partnerships mainly conducting investment business shall be complied with. This provision may be simply a placeholder for future regulations or a reference to the Administrative Provisions on ForeignInvested Venture Capital Enterprises, which provide a form of non-legal person venture capital fund similar to a partnership.

According to the Tentative Measures on the Establishment of Foreign-Invested Equity Investment Fund Management Enterprises in Beijing recently issued by the Beijing government, foreign investors may establish equity investment fund management enterprises in the form of a partnership, provided that such is permitted under the state polices. We are hopeful that further developments and clarification will be in place before the Measures come into effect on March 1, 2010.

Written by Jeanette Chan, partner Sue Yang, associate Paul, Weiss, Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Office Tower A No. 7 Dong Sanhuan Zhonglu Chao Yang District, Beijing 100020 PRC Email: jchan@paulweiss.com Ph: (8610) 5828-6300 or (852) 2846-0300

Philippines

Amendments of the Copyright Law will Reflect ISP ‘Safe Harbor’ Provision under the E-Commerce Act A service provider or ISP is defined, in the Electronic Commerce (“E-Commerce”) Act, as a provider of online services or network access, or the operator of facilities for such online services or network access.

Asian Legal Business ISSUE 10.2

News | regional update >>

Section 30 of the E- Commerce Act, which was borrowed from the ‘safeharbor’ provisions of the U.S. Digital Millennium Copyright Act, shields an ISP from copyright infringement committed by its subscribers by holding it free from any liability in respect of the electronic data message or document for which it merely provides access, if such liability is founded on (a) the obligations and liabilities of the parties under the said data message or document; or (b) the making, publication, dissemination or distribution of such material or any statement in such material, including possible infringement of any right subsisting in such material; as long as the ISP does not (i) have actual knowledge, or is not aware of the facts or circumstances from which it is apparent, that the making, publication, dissemination or distribution of such material is unlawful or infringes any rights in such material; (ii) knowingly receive a financial benefit directly attributable to the unlawful or infringing activity; and (iii) directly commit any infringement and does not induce or cause another person to commit any infringement or unlawful act and/or does not benefit financially from such act of another person.

Congress has taken steps to amend the Copyright Law under the Intellectual Property (“IP”) Code to keep it in pace with advances in infringement in e-commerce. Pending bills seek to broaden the scope of copyright infringement under Section 216 of the IP Code by adding a new sub-section: “A person infringes a right protected under this Act when he: (a.) directly commits an infringement or causes an infringement to be committed; (b.) benefits financially from the infringing activity of another person who commits an infringement if the person benefiting has the right and ability to control the activities of the other person; or (c.) enables or induces infringement by another person enabling or inducing the infringement which he has or reasonably should have knowledge of and materially contributes to it.”

Under the expanded scope of copyright infringement, it will be possible to hold ISPs liable for infringement committed by subscribers in instances outside the “safe harbors” of the E- Commerce Act; making the IP Code more attuned to the current trends in online piracy. ISPs will www.legalbusinessonline.com

have to be more vigilant in ensuring that their services and facilities are not used as venues for infringement.

Written By Franco Noel A. Manaig Senior Associate SyCip Salazar Hernandez & Gatmaitan 3rd Floor, SSHG Law Center 105 Paseo de Roxas 1226 Makati City, Philippines T (632) 817 9811 to 20; 817 2001 to 09 F (632) 817 3896; 817 3567; 817 3145; 817 3570; 818 7562 E fnamanaig@syciplaw.com W www.syciplaw.com

SINGAPORE

Proposed Introduction of Catalist Listing Rules for Mineral, Oil and Gas Companies Singapore Exchange Ltd (“SGX”), in August 2009, issued a consultation paper inviting public comments on its proposed rules to allow early stage mineral, oil and gas (“MOG”) companies to list on Catalist, its sponsor-supervised board for fast growing companies. With the proposed listing of such early stage MOG companies on Catalist, SGX seeks to broaden investors’ choices and deepen its resource sector, and at the same time, enhance its proposition value as a choice listing venue for fast growing resource companies.

This is in line with SGX’s goal of having Catalist become Asia’s leading fund raising platform for fast-growing companies.

Companies in the minerals, oil or gas industries are highly technical and capital-intensive in nature. MOG companies in their early stages of exploration and feasibility studies may lack the requisite profit track record to list on the Mainboard compared to those already in commercial production with on-going revenue streams. Further, such early stage MOG companies may require several rounds of funding over a long period with no certainty of making an economically viable discovery of

resources, resulting in a significantly risky venture for investors.

To address the business risks involved in investing in such early stage MOG companies, SGX reviewed the requirements of similar listings in other developed jurisdictions and formulated the proposed listing rules for our market, introducing standards that are in line with international practices.

Some of the key features of the proposed listing rules include: 1. MOG companies seeking a listing on Catalist must have discovered deposits with reasonable prospects for economic extraction, as certified by an independent qualified technical expert in accordance with internationally recognised standards; 2. MOG exploration companies listed on Catalist must provide quarterly reports on its use of funds, including a projection on the use of funds for the next immediate quarter, material information on exploration and extraction activities undertaken and an update on its reserves and resources; and 3. Sponsors of MOG companies listed on Catalist must have access to appropriate technical expertise to discharge their duties and such expert must be independent of the sponsored MOG companies.

The public consultation has closed but its results have yet been published. SGX reserves the right to publish responses received and to change the proposed listing rules. Ultimately, the amendment of the Catalist listing rules is subject to the approval of the Monetary Authority of Singapore.

For readers who are interested to learn more on the above, you may wish to access the relevant website (http://www.sgx.com/ wps/portal/corporate/cp-en/regulation/ public_consultation).

Written by Ms Tan Chin Yee and Ms Ng Siao Hui Ms Tan Chin Yee Legal Associate, Corporate Practice Ph: (65) 6322-2238 Fax: (65) 6534-0833 E-mail: tanchinyee@loopartners.com.sg and Ng Siao Hui Corporate Finance Executive Ph: (65) 6322-2285 Fax: (65) 6534-0833 E-mail: ngsiaohui@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

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News | regional update >>

Vietnam

Interpreting Vietnam’s WTO commitments on market openings in services – Some rules remain unvisited Under the Schedule of Specific Commitments in Services (“Service Schedule”), made by Vietnam to the WTO, foreign investment in many sectors is limited to joint ventures (“JV”) with domestic investors. In many instances the Service Schedule keeps silent about any additional restrictions on who can act as the domestic partner in a JV. To determine what restrictions apply to domestic investors there remains one potent conflict: if domestic law provides restrictions, and the Service Schedule is silent, will domestic law preempt the Service Schedule’s silence?

The Service Schedule itself provides no clarification on this issue.

Take for example, travel agencies and tour operation services (“Tourism Services”).

Article 51 of the Law on Tourism (“Tourism Law”) requires the Vietnamese partner in a Tourism Services JV to be a company possessing an international travel license. For Tourism Services, the Service Schedule reads, “None, except that: foreign service suppliers are permitted to provide services in the form of JVs with Vietnamese partners”. As normally interpreted, this text is considered silent on the restrictions on domestic partners.

The Tourism Law’s implementing provisions, though issued after the country’s accession to the WTO, remain silent regarding the application of restrictions under Article 51. Because of this conflict, the licensing authorities have been reluctant to approve Tourism Services JVs where the domestic partner does not have an international travel license.

Such reluctance may have been avoided if another rule in the Report of the Working Party on the Accession of

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Vietnam (“Working Party’s Report”) had also been referenced. In paragraph No. 475 of the Working Party’s Report, “foreign service suppliers were free to choose their partners unless otherwise specified in Viet Nam’s Schedule of Specific Commitments” (“Rule 475”). Though Rule 475 may have ignored in practice, it should prevail over the provisions of domestic law such as Article 51 of the Tourism Law. As part of an international treaty, in the Service Schedule’s silence, Rule 475 pre-empts domestic restrictions.

Accordingly, a foreign investor is legally free to choose its local Tourism Services JV partner, regardless of possession of an international travel license.

Reaching a complete understanding of Vietnam’s commitments on market opening in services requires that the Service Schedule be read with paragraphs 472 to 508 of the Working Party’s Report. To properly apply Vietnam’s WTO commitments, local licensing authorities should revisit the provisions of the Working Party’s Report.

Written By Bui Ngoc Hong, Partner and Huynh Tan Loi Indochine Counsel Unit 4A2, 4th Floor, Han Nam Office Bldg.

65 Nguyen Du, District 1 Ho Chi Minh City, Vietnam (Tel) +848 3823 9640 (Fax) +848 3823 9641 hong.bui@indochinecounsel.com www.indochinecounsel.com

MALAYSIA

The Proposed Malaysian Whistleblower Act and the Liability of Employers Matters in the workplace involving conflict of interests, corporate noncompliance and crimes often come to light through employee reporting. To incentivize disclosure, it is necessary to ensure that employees are legally

shielded from negative repercussions.

The Malaysian Government proposes to introduce an all-encompassing whistleblower law by 2010. This is viewed as being critical to stemming corruption. A meaningful law will need to address, at the very least, the following salient issues: • Whether disclosure is a legal obligation or a choice.

• Protection from negative repercussions arising from disclosure.

• Standards determining whether disclosures will be protected from repercussions.

• Legal sanctions for retaliatory action taken against the whistleblower.

While there are existing legal whistleblower protections relating to auditors, companies, banking, corruption, money laundering, offences against the State, to persons and to property, there is no specific law which protects employees in all instances of workplace non-compliance.

Currently, whistleblowers who suffer detriment as a result of disclosure may claim constructive dismissal. The burden of proof in a constructive dismissal claim however lies with the claimant. It is also necessary for the wronged employee to first exit employment. There are no clear guidelines as to what would constitute liability for retaliatory action, and it also takes several years before the Industrial Court hears the claim.

The employer, rather than the relevant individual(s), would be liable. Thus, individuals in positions of authority may not be sufficiently discouraged from taking retaliatory action.

It remains to be seen whether the proposed Act will introduce additional protections to private sector whistleblowers, and whether liability for constructive dismissal will continue following the Act’s introduction. To be truly effective, clear standards relating to what constitutes a protected disclosure, an efficient reporting infrastructure and strict enforcement will be key.

Written by Woo Wei Kwang, Partner Wong & Partners Suite 21.01, Level 21 The Gardens South Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia Tel: +603 2298 7888 DID: +603 2298 7898 Fax: +603 2282 2669 wei.kwang.woo@wongpartners.com

Asian Legal Business ISSUE 10.2

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Feature | IP >>

IP:

The ultimate intangible ALB looks at what types of work have been keeping lawyers busy in the seemingly recession-proof practice area. What challenges await them as macroeconomic conditions around the region start to improve?

I

ntellectual property (IP) may be the perfect microcosm of the countercyclical nature of legal practice.

The all-too-familiar story of the commercial lawyers sweating over just where their next big deal would come from is perhaps unfamiliar to many IP lawyers. For them, the economic slowdown of the last two years has been a struggle of an entirely different nature. Many have found it difficult to keep up with Asian clients’ everincreasing appetite for IP advice.

Asian IP in the downturn When speaking to ALB late last year Horacio Gutierez, who is Microsoft’s

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corporate vice president for IP and licensing and deputy general counsel, said the challenge for decisionmakers in Asia was to stick by IP – to invest time and resources in cultivating conditions conducive to the development and protection of IP – even in the face of economic difficulties.

“There is a risk at a time of global downturn for companies and governments to lose sight of things that are important for the long term, as they might not be perceived as urgent in the context of all other challenges that they are facing,” he said. “IP protection is one of these things that is not only important for

the long term but likely to be one of the key elements that will help economies out of the situation they are facing right now…I am convinced that innovation is going to allow us to come out of the economic crisis much stronger than we went in. The key, in my opinion, is when governments and policymakers think about this topic, they need to recognise the need to create a system of incentives for innovators in their countries, to invest and to put capital at risk to develop new technologies and products. This is a time when you want to encourage people to be creative and to invest in creating new opportunities.”

Asian Legal Business ISSUE 10.2

Feature | IP >>

“Theoretically it is possible to use IP as security for loans in Hong Kong and China ... as IP assets have become more important in modern business, there has been a shift from physical to intangible assets”

►► How some companies are using their IP: pros and cons 1. IP-based loans IP loan is a bank loan using IP assets as collateral.

Lenders usually offer borrowers non recourse loans at a loan to value ration of 25-30% of the appraised value of the asset (depending on the asset quality, asset holder creditworthiness, and other risk factors) Pros • Introduction of a new asset class for debt financing and companies credit merit valuation Cons • Difficulty in valuation of the IP assets • Collateral disposal in the event of defaults 2. IP Securitisation IP securitisation is a structured finance tool typically applied to illiquid contracts whereby a company transfers IP rights in receivables (eg: royalties) to an independent legal entity, which in turn issues securities to capital markets and gives the proceeds back to the owner of the IP Pros for IP owners • Lower cost of capital and better funding conditions • Options to hedge themselves from all risks related to underlying IP performance and legal validity • Liquidity • Non-dilutiveness structure • Possibility to increase return on IP portfolio Pros for investors • Allows investment in technology niche • Permits investment in IP narrowly rather than in a company as a whole • Diversification Cons • Issuance cost and break-even size may be hard to gauge • Deals may be complex and costly • Obvious risks to IP valuation and exploitation 3. IP sale and lease-back IP assets are sold to an intermediary. Later, the original owner leases the IP asset back from the intermediary and agrees to pay leasing interests.

Pros: • Increase in liquidity through sale Cons: • Fiscal treatment on additional earning • Registration costs (multi-country) 4. IP for venture capital financing Strong IP assets, like patents, are key investment decision factors for Venture Capital firms Pros: • Suitable form of financing for start-ups • Allows for further debt financing Cons: • No advantages from debt financing on cost of capital and interest expenditures • Founders’ may cede control of company to Venture Capitalists Source: Politiecnico di Torino

www.legalbusinessonline.com

Connie Carnabuci

Freshfields Bruckhaus Deringer

And various regimes across Asia certainly haven’t been short on encouragement. From continuing law reform in China, such as the Third Revision to the Patent Law and the consultation on digital copyright in Hong Kong, regulators and rightsholders alike, it seems, are on the same page when it comes to the importance of IP. “There are very exciting signs coming out of the Asia-Pacific region,” Gutierez said. “Real inroads have been made in terms of combating piracy and an overall evolution in terms of how people perceive IP,” he added, citing the mainland as the most salient example.

“In China you see figures such as the number of patents being filed before CIPO, or the number of patent litigations being commenced there, and you can tell that we are witnessing an inflexion point. A country like China perceives itself as making the transition from being an importer and consumer of innovation and turning into an exporter of these, therefore revisiting its attitudes to IP.” These changing attitudes have generated a fair number of fresh instructions for IP lawyers, both on the mainland and across the region.

This isn’t to say though, that it has been all plain sailing for Asia’s IP lawyers during the economic downturn, especially for those who had hitherto subsisted on a strict diet of filing work.

“Rights-holders have become more selective in their portfolio management and filing in countries where necessary,” said Alban Kang, a partner with ATMD Bird & Bird in Singapore. He says Alban Kang “ensuring adequate ATMD Bird & Bird workflow considering

the reduction in trademark and patent filings,” is one of the challenges facing IP lawyers in an economic downturn.

But clients’ apprehension to lodge patent and trademark applications with the same frequency they once had, or their willingness to enforce their rights, are not entirely novel developments in lean economic times.

Something which is more unusual, however, is the cooperative approach that many Asia-based companies are adopting vis-a-vis IP. Connie Carnabuci, partner at head of Freshfields’ IP/IT practice in Asia, explains. “Enforcement remains as important and strategic as before the financial crisis,” she said. “[But] businesses are entering into cooperation agreements with other rights owners to share the cost of developing new products or entering new markets,” she says, pointing out that “under other circumstances they would have done this on their own.”

It’s all about looking at IP under the microscope – assessing where it fits in to a company’s broader objectives. “In the current market, clients are keen to ‘sweat their assets,’ Carnabuci said.

“This means businesses are carrying out audits of their IP portfolio to determine where there are gaps in relation to their business plans. They are looking to leverage under-utilised assets in licensing and collaborations, or they are deciding to make disposals to generate capital.”

New developments While generating capital through disposal of their IP is one scenario that is popular with many Asia-based companies at the moment, it isn’t necessarily the only avenue available to companies looking to leverage IP for capital. For the last ten years, a number of companies have been unlocking their IP as a source of financing. These companies have sought to put up their IP as collateral to obtain non-recourse loans, or have bundled their IP assets to be sold off in a quasi-securitised form, sold IP to intermediaries in sale and lease-back transactions, and used it as a hook with which to lure venture capital financing (see box out for more details).

Despite the financial crisis, they have remained popular with both companies and investors. Ed Munzer, who is

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ATMD Bird & Bird’s

A

TMD Bird & Bird LLP is a leading Singapore commercial law firm with a focus on Singapore and Asian regional work.

Its global association with international law firm Bird & Bird in January 2009 has strengthened the firm’s resources and international reach. With Bird & Bird’s 21 offices across Europe and Asia, ATMD Bird & Bird is strategically well placed to offer local expertise within a global context, helping clients to realise their business goals both domestically and internationally.

Award-winning practice The firm’s IP practice is highly ranked and picked up the Singapore IP Firm of the Year award for the fifth straight year at the ALB South-East Asia Awards in 2009 as well as the Managing IP Award for Singapore Firm of the Year. Across the offices, Bird & Bird picked up other major awards included awards from Managing IP and World Leaders International IP Awards. Says the Sectors Automotive Aviation & Aerospace Banking & Financial Services Communications Food & Beverage E-Commerce Electronics Energy & Utilities - CleanTech & Renewables Information Technology

Intellectual Property Life Sciences Media Sport

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Practice Areas Arbitration Banking & Finance Commercial Copyright Corporate Corporate Restructuring & Insolvency Dispute Resolution EU & Competition Law International HR Services - Employment - Employee Incentives & Benefits - Immigration Outsourcing Patents & Know How Privacy & Data Protection Real Estate Regulatory & Administrative Public Sector Tax Trade & Customs Trade Marks & Design

firm’s Managing Partner Alban Kang, “We are proud of these achievements and are grateful to our clients for their support. We plan to continually work to improve the quality of our service to deliver to clients what they need most: sound and practical legal advice.”

The IP Group comprises 5 partners and 11 associates and patent attorneys many of whom have also been ranked individually in the IP field. With the Bird & Bird global association, they can now draw upon more than 250 IP specialists across 21 offices.

Alban Kang, Sheena Jacob, Cyril Chua, Koh Chia Ling and Edmund Kok have all been ranked as leading individuals in Asialaw Leading Lawyers In addition, Alban Kang, the Managing Partner has also been ranked as a leading individual by Asia Pacific Legal 500, World’s Leading Trade Mark Law Practitioners, World’s Leading Patent Law Practitioners as well as The International Who’s Who of Trademark Lawyers. Sheena Jacob has also been ranked in the World’s

Leading Trade Mark Law Practitioners and World’s Leading Patent Law Practitioners.

The IP Group’s breadth of practice also provides it with an edge. The firm handles trade mark, patent and design prosecution and filing globally with patent attorneys including US patent attorney Nevin Carmichael and biotech patent attorney Edmund Kok providing key expertise. Alban Kang and Koh Chia Ling spearhead the specialist IP litigation capability and handle trade mark and design litigation, patent infringement actions as well as other forms of IP litigation such as copyright and trade secret litigation. Cyril Chua leads the antipiracy capability of the Group with a strong regional focus on anti-piracy enforcement actions in a number of countries in the region including Thailand, Vietnam and India. Sheena Jacob and Karol Goh lead the Group’s transactional and advisory capability and advise clients on regulatory issues as well as IP management, licensing and collaboration.

Asian Legal Business ISSUE 10.2

Firm Profile

ATMD Bird & Bird

Global Reach Sector Focus The Group’s partners combine this legal expertise with an in-depth understanding of the various sectors and industries in which their clients operate. Sheena Jacob, partner and head of the IP & Technology Group, “Our clients appreciate our sector focus expertise. We are able to provide practical legal advice that helps them meet their business needs.”

Sheena Jacob focuses on regulatory and transactional work in the Life Sciences area which has been growing steadily as well as the developing Media sector where she has provided copyright advisory services. Alban Kang’s special focus is in Aviation having acted in patent litigation for a leading airline and in Electronics where he has handled a number of high profile cases for a number of multinational clients.

Cyril Chua’s special focus is in Electronics and Communications and he looks after the interests of a number of clients in these industries whose rights are infringed in the region. In addition to his litigation capability, Koh Chia Ling is the focal point for work in the IT sector having special expertise in IT security. Karol Goh’s special focus is in Food wh ere she handles IP advisory and franchise work and Media where she handles various copyright issues.

About Bird & Bird

ATMD Bird & Bird IP Group Partners

Alban Kang alban.kang@twobirds.com

Sheena Jacob sheena.jacob@twobirds.com

Koh Chia Ling chialing.koh@twobirds.com

Karol Goh karol.goh@twobirds.com

Cyril Chua cyril.chua@twobirds.com

Bird & Bird internationally provides a unique service to its clients based on an extensive knowledge of key industry sectors and legal practice. The firm has an outstanding and longstanding reputation built on many years of innovation and excellent case and project management.

2 Shenton Way #18-01, SGX Centre 1, Singapore 068804 Phone +65 6534 5266 Fax +65 6223 8762 ATMD Bird & Bird LLP is a Singapore law practice registered as a limited liability partnership in Singapore.

The Firm is associated with Bird & Bird, an international legal practice. It is solely a Singapore law practice and is not an affiliate, branch or subsidiary of Bird & Bird or Bird & Bird LLP.

www.legalbusinessonline.com

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Feature | IP >>

►► ALB’s leading IP law firms: Asia China Domestic

India

Korea

Taiwan

• CCPIT Patent & Trademark • Fangda Partners • King & Wood • Lifang & Partners • Liu, Shen & Associates • Longan • Peksung • Watson & Band • Zhongzi

• Amarjit & Associates • Amarchand & Mangaldas • Anand & Anand • Chandrakant M. Joshi Patent and Trademark • D. P. Ahuja & Co. • K&S Partners • Kan & Krishme • Lall & Sethi • Lexorbis • Subramaniam Nataraj & Associates

• Bae, Kim & Lee • Darae Law & Patent • Kim & Chang • Lee & Ko • Y.P.Lee, Mock & Partners

• Chen & Lin • Deep & Far Attorneys • Lee and Li • Tsar & Tsai • Winkler Partners

Malaysia

Thailand

• Henry Goh & Co • Tay & Partners • Wong & Partners • Wong Jin Nee & Teo

• Baker & McKenzie • Chavalit Finch & Partners • Domnern Somgiat & Boonma • Rouse & Co • Satyapon & Partners • Tilleke & Gibbins

China International • Baker & McKenzie • Bird & Bird • Jones Day • Lovells • Rouse & Co

Hong Kong International • Baker & McKenzie • Bird & Bird • Jones Day • Lovells • Simmons & Simmons • Mayer Brown JSM

Hong Kong Domestic • Ella Cheong • Eccles & Lee • Deacons • ONC Lawyers • Rebecca Lo & Co • Sit, Fung, Kwong & Shum • So Keung Yip & Sin • Vivien Chan & Co • Wilkinson & Grist

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Indonesia • Amroos & Partners • Biro Oktroi Roosseno • Hadiputranto, Hadinoto & Partners • Lubis Santosa & Maulana • Soemadipradja & Taher

Japan Domestic • Abe & Matsutome • Abe, Ikubo & Katayama • Anderson Mori & Tomotsune • H. Okada • Momo-o, Matsuo & Namba • Mori Hamada & Matsumoto • Nakamura & Partners • Seiwa Patent & Law • TMI Associates • Yuasa & Hara

Japan International • Baker & McKenzie • Finnegan • Lovells • Morrison & Foerster • Ropes & Gray

Middle East • Abu-Ghazaleh Intellectual Property • Al Tamimi & Company • Clyde & Co • Saba & Co • Nassir Kadasa & Partners

Philippines • ACCRA Law Offices • Hechanova Bugay & Vilchez • Quisumbing Torres • Romulo Mabanta Buenaventura Sayoc & De Los Angeles • Sycip Salazar Hernandez & Gatmaitan • Villaraza Cruz Marcelo & Angangco

Singapore • Amica Law • ATMD Bird & Bird • Baker & McKenzie.Wong & Leow • Drew & Napier • Lee & Lee • Rodyk & Davidson

Vietnam • Lovells • InvestConsult • Pham & Associates • Tilleke & Gibbins • Vision & Associates

Note: ALB’s Leading IP firms: Asia was a survey conducted among in-house lawyers, corporate and private practice lawyers from across the AsiaPacific. These results originally appeared in the June 2009 edition of the ALB Magazine.

Watch out for our 2010 rankings which will appear in issue 10.6

Asian Legal Business ISSUE 10.2

Feature | IP >>

executive managing director of Paradox Capital Partners, a capital provider that specialises in IP-based loans, secondlien investments and mezzanine investments, has been prolific in writing on the appeal of IP in this regard. He says “Based on long experience and well-ingrained investment principles, investors will continue to invest in companies and assets associated with differentiated products that are protected by high barriers to entry from new competition, driven by the fact that these considerations indicate stronger and more reliable cash flows and profits.

It naturally follows that companies with strong IP assets and professionalised IP management, which are indicators of high levels of differentiation or of barriers to entry, will be attractive to investors – particularly as the worldwide economy becomes increasingly knowledge-based,” he says.

Paradox has worked with a number of lifestyle apparel and home-goods brands, including BCBG Max Azria, Rachel Ashwell and Betsey Johnson. But despite Munzer’s optimism about the appeal of IP to companies and investors, these types of transactions are still very rare, and in Asia virtually non-existent. “This practice is not as developed in Asia as in the US,” said Freshfields’ Carnabuci.

“Theoretically it is possible to use IP as security for loans in Hong Kong and China, and in many other countries in Asia. As IP assets have become more important in modern business, there has been a shift from physical to intangible assets. IP assets can therefore be considered to be of adequate quality for a bank to use as a security.”

While it may be theoretically possible, many banks, both in the US and Asia, have been reluctant to allow IP rights, no matter how strong, to serve as the role collateral for loans. These financial institutions have preferred to err on the side of caution, arguing that it is simply too difficult to accurately value the IP being used as collateral and make a sound risk assessment.

These concerns have been assuaged somewhat by the increasing number of financial services intermediaries which are providing (not only) working capital and loan guarantees but also helping to make valuations more transparent and comprehensible. There is still much ground to make up and countless more investment boards to convince.

Here, the fact that the worldwide pool of IP assets is thought to be quickly reaching US$3trn could just be the catalyst that financial institutions need. Just as this area will doubtless prove a profitable one for the companies, financial institutions and investors involved, so too will it be lucrative for IP lawyers.

The key, it seems, rests with taking a risk of one’s own and establishing an offering early on. After all, don’t a great number of the region’s IP practitioners owe much of their present-day success to taking a similar gamble just a few years ago? ALB www.legalbusinessonline.com

firm featured INTELLECTUAL PROPERTY & TECHNOLOGY Lee & Lee is one of Singapore’s best established and leading law firms. The firm provides a comprehensive range of legal services to serve the differing needs of corporations, financial institutions and individuals.

Led by Senior Counsel, Mr Tan Tee Jim, the department has extensive experience in advising clients in a wide variety of contentious and non-contentious intellectual property (IP) and technology matters. In particular, it has been involved in : • IP litigation, prosecution and enforcement • Registration and management of portfolios of trademarks, patents and design • Brand protection strategies • Franchising and distribution agreements • Research and development agreements • Technology transfer agreements • Telecommunications and information technology agreements • Domain name disputes

Tan Tee Jim, S.C. t: +65 6557 4615

e: tanteejim@leenlee.com.sg

Toh Kok Seng t: +65 6557 4619

e:tohkokseng@leenlee.com.sg

Boo Yee Swan t: +65 6557 4869

e: booyeeswan@leenlee.com.sg

Margaret Law t: +65 6557 4886

e:margaretlaw@leenlee.com.sg

Christopher De Souza t: +65 6557 4854

e: chrisdesouza@leenlee.com.sg

Maurice Cheong t: +65 6557 4816

e:mauricecheong@leenlee.com.sg

Lee & Lee 5 Shenton Way, #07-00, UIC Building, Singapore 068808 +65 6220 0666 (Main Line) | +65 632 41638 www.leenlee.com.sg | ipdept@leenlee.com.sg

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Feature | M&A >>

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M&A

Asian Legal Business ISSUE 10.2

Feature | M&A >>

After a less than impressive 2009, ALB takes a preliminary look at what will be the salient M&A trends for 2010, and which firms are best positioned to take advantage of them

W

hile M&A was largely restricted in the AsiaPacific region last year to Chinese outbound deals, things are picking up for the region in 2010. Recent Ernst & Young research found that over a third of CEOs of US companies are either likely or highly likely to make acquisitions this year. Boston Consulting Group and McKinsey contend that one in five of Europe’s largest companies are also busily identifying possible acquisition targets across the globe, while other research firms cite similar findings.

In Asia, the outlook is as positive, if not more so, according to lawyers recently interviewed by ALB. “I’m optimistic about the prospects for increased M&A activity across Asia in the coming year, provided there are no seismic meltdowns on the scale of Lehmans,” said Robert Ashworth, Asia head of corporate at Freshfields. And Jonathan Stone, co-head of Skadden’s corporate practice in non-Japan Asia, shares Ashworth’s enthusiasm, saying the stability that seems to have washed over Asia’s financial markets towards the end of 2009 has placed companies in a good position to make M&A deals.

“The markets picked up quite well in

the second half of 2009 and from what we can see, a lot of companies have met their capital raising requirements and have strengthened their balance sheets,” he said. “There is enough Robert Ashworth Freshfields stability around to suggest that deal flow will pick up. Some sovereign wealth funds took some difficult writedowns during the crisis,” he said. “Now they are starting to come back, slowly – but we see private equity coming back more quickly especially with the increased stability on equity markets plus the further availability of credit.”

But while it is impossible to predict just how much 2010 will better 2009 for dealflows, or for that matter whether it will at all, one certainty is that dealmaking will be an entirely different proposition ths year to what it was.

Outbound PRC deals to continue?

One of the most striking trends seen in Asian M&A throughout 2009 was the increase in outbound China deals, headlined by transactions such as Chinalco’s bid for a stake in Australia’s Rio Tinto, China Minmetal’s proposed acquisition of Oz Minerals, and China

“They have their hands on the money; the funds have been raised and it’s burning a metaphorical hole in their pockets. The rising share markets now mean greater liquidity and therefore more open exit options, once a business has been acquired and turned around” www.legalbusinessonline.com

Nonferrous Metals’ partial offer for Lynas Corporation.

These types of transactions were all about securing access to the natural resources required to keep the dragon economy firing for years to come.

“Certainly outbound M&A from China has enjoyed its most notable couple of years,” says Freshfields’ Ashworth. “The focus of this activity is ... deals driven by the need for China to secure ongoing supplies of energy and raw materials.”

But while each of the deals above indicate China’s thirst for natural resources and its interest in resourcerich countries, scrutiny shows that they each have something else in common. Each deal fell through, which has led a number of commentators to question if Chinese resource-driven outbound M&A will continue to be as prominent in 2010.

Even if these sorts of deals do dry up, Ashworth says that the M&A landscape in Asia’s largest economy is diverse enough to guarantee lawyers across the region busy times for this year. “The other driver [of outbound M&A from China] has been the ability to acquire well-known brands at recession-impacted prices,” Ashworth said. “This has brought about several actual – and prospective – deals in Europe and the West generally.”

Robert Ashworth

Freshfields Bruckhaus Deringer

41

Feature | M&A >>

►► Aggregate growth in Sovereign Wealth Funds assets, 2007-2009 Value (US$trn)* 3.5

3.05

3.0 2.5

3.22

2.02

2.0 1.5 1.0 0

2007

2008

2009

*Source: Prequin

Year

Jeanette Chan, a Hong Kongbased partner with Paul Weiss, also warns against pigeon-holing Chinese M&A as either strictly outbound or resource-driven. She says PRC-related deals in 2010 are likely to be pursued as an avenue through which Chinese companies can increase their international exposure and market Jeanette Chan Paul, Weiss share. “In areas like the service industry, the domestic Chinese market is extremely competitive with little room left for some Chinese companies to grow,” Chan says.

“In some deals in this sector we can see companies looking to expand beyond contracting domestic markets, trying to grab global market share.”

Chan cites Shanghai Jin Jiang’s recent acquisition of Interstate Hotels & Resorts (on which Paul, Weiss was lead counsel for Interstate) as a good example. In this US$307m deal, Shanghai Jin Jiang partnered with US-based real estate investment firm Thayer to acquire the NYSE-listed Interstate.

This was a move which was as much financial as it was about building the growing Chinese company’s international credentials. (Interstate has over 232 profitable properties across the world.) “We will see a lot of Chinese companies in the service industries – whether it is hospitality, broad consumer or automobile – look to international Nick Norris targets as a way to Skadden internationalise their

own service standards and build their brands,” Chan says.

Nick Norris, the co-head of Skadden’s Asia-Pacific corporate and Hong Kong law practices, foresees M&A deals which involve strategic partnerships as becoming increasingly common in the year ahead. “We are doing deals across a range of sectors and with clients now seeing opportunities for strategic acquisitions as well as strategic partnerships,” he said. “Rather than just selling out completely, many of these deals have seen companies use strategic partnerships as leverage to push their businesses to the next stage of development. This is especially relevant to businesses in the PRC and Taiwan.”

Bankrolling M&A in 2010 While predicting what course Asian outbound M&A will take this year may be difficult, speculating as to who will finance the deals is decidedly easier.

With banks still apprehensive to finance anything, let alone M&A, the scene is set for greater involvement from both private equity and sovereign wealth funds (SWFs). “2010 is likely to see more involvement in M&A deals from SWFs and private equity houses primarily because each has ready access to capital, and could benefit from rising stock markets,” says Freshfields’ Ashworth.

“They have their hands on the money; the funds have been raised, and it’s burning a metaphorical hole in their pockets. The rising share markets now mean greater liquidity, and therefore more open exit options once a business has been acquired and turned around.” But the fact that the GFC was disastrous for a number of

►► Top Asian Sovereign Wealth Funds (SWF) by total assets Sovereign wealth funds

Country

Year established

Source of capital

Total assets (US$bn)

1

Abu Dhabi Investment Authority

UAE

1976

Oil

2

SAFE Investment Company

PRC

1997

Non-commodity

7.5

3

Kuwait Investment Authority

Kuwait

1953

Oil

22.9

4

Government of Singapore Investment Corporation (GIC)

Singapore

1981

Non- commodity

22.0

5

China Investment Corporation

PRC

2007

Non- commodity

20.0

6

Hong Kong Monetary Authority Investment Portfolio

Hong Kong

1993

Non-commodity

16.3

31.1

*Source: Prequin

42

Asian Legal Business ISSUE 10.2

Feature | M&A >>

GE Capital Aviation Services

Be an exceptional tax lawyer VP International Taxes & Tax Counsel Diversified Global Business Fortune 500 Most Admired Company Phenomenal New Role GE CAPITAL AVIATION SERVICES, the commercial aircraft financing and leasing business of GE, has an immediate opening for vice president , international taxes and tax counsel. In this role, you will be part of the deal team to liaise and discuss the specifics of aircraft and engine leasing and sale and purchase of aircraft and engines with GECAS’ customers. You will be responsible for the international tax issues of the deal such as, but not limited to, local withholding tax, application of tax treaties, permanent establishment exposure and basic US international tax issues.

You will be responsible for: • Reviewing tax aspects of LOI's and contracts and making sure that the deal documentation includes the appropriate tax provisions • Reviewing deal documents, including tax indemnity agreements and discussing such with customers • Analyzing withholding tax and other local country tax issues relating to non-US deals • Coordinating transfer tax on deliveries (aircraft/engine/rotables)

www.legalbusinessonline.com

• Completion and sign off on deal approval papers • Tax advisor on structured transactions such as bulk sales of assets and securitizations • Supporting the business teams on other deal-related or tax-related matters • Managing outside tax advisors, including review of tax opinions • Identifying and assisting in the resolution of transfer pricing issues • Identifying US international tax issues The ideal candidate must have a law degree or LL.M. in taxation, with a minimum of 10 years of international tax experience in either an international transaction tax team of a Big 4 accounting firm or Multinational Corporation. Candidate should also have experience in reviewing, drafting and negotiating tax provisions. Strong interpersonal and communication skills, a proactive approach and proven problem solving skills are desired.

GE Capital Aviation Services has a fleet of over 1,800 owned and managed aircraft with more than 245 airlines in some 75 countries. GECAS offers a wide range of aircraft types and financing options, including operating leases and secured debt financing and management. GECAS, a unit of GE Capital, has offices in 23 cities around the world.

GE is a diversified global infrastructure, finance and media company that is built to meet essential world needs.

From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. GE is Imagination at Work.

Please contact Suriani Norahim T+65 6303 0150 E suriani.norahim@hays.com.sg

© 2010 General Electric Company

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Feature | M&A >>

Mergers and Acquisitions Q&A

The start of a new world order?

Loo Choon Chiaw discusses the promise of Asian Asian Legal Business: As we enter the new year, what do you feel are the prospects for recovery for mergers and acquisitions (“M&A”) in Asia?

Loo Choon Chiaw: There are definitely indications of economic recovery. The stock markets in the region are picking up. Emerging economies in Asia appear to have weathered the financial tsunami. The US economy also appears to be recovering gradually. Some analysts have also opined that we have returned to a point where there would be a more active M&A market, citing supporting factors including, the high amount of cash reserves, the strong desire of conglomerates to acquire revenue boosting businesses, the return of private equity, funding and investor confidence.

Many companies which have postponed their acquisition plans in the last two years, whether due to market volatility or a desire to shore up their internal resources, or for other reasons, are now back in the market.

Smart investors should still be able to seize good opportunities over the next year or so.

On the other hand, in the light of the resurgent IPO market, some companies may prefer to go through the IPO process to raise funds as opposed to inking a deal with a strategic buyer.

ALB: Are there signs that Asia-Pacific will be increasingly important to global deal making?

LCC: The escalating importance of AsiaPacific to global deal making was already evident in 2009. The 2009 statistics from Thomson Reuters showed that the AsiaPacific region contributed to approximately 20% of total worldwide M&A activities compared with statistics from 2006, where the Asia-Pacific region contributed just 10% of the global M&A activities, there has certainly been an encouraging increase.

Loo Choon Chiaw

44

ALB: Recent studies out of the US/ Europe show that over a third of CEOs at Fortune 500 companies will make acquisitions this year. Are your Asiabased clients expressing similar views?

LCC: Our clients, especially those based in China, have expressed keen interests to continue with their expansion and acquisition

plans. Again, according to Thomson Reuters, China’s economy has increased over the course of the year, and inbound deal value jumped 75% in 2009 over the prior year.

This is primarily attributed to strong domestic demand across many sectors, mainly contributed by the government’s stimulus plans particularly in the infrastructure and construction sectors.

As noted by the recent issue of the Wall Street Journal, the total outbound M&A activities of China in 2008 and 2009 collectively surpassed the total outbound M&A activities of China for the previous eight years. For instance, in terms of outbound transactions, Chinese investments into Australia alone reached a record high of $6.2bn in the first half of 2009.

China’s outbound M&A activities have also been driven by the country’s need for natural resources to secure longterm strategic supplies for its growing population. China’s economy picked up significantly in the third quarter, with its GDP growth jumping to an annual 8.9 percent from 7.9 percent in the second quarter. These factors bode well for Chinese outbound transactions going forward.

ALB: A key concern of cross-border M&A recently seems to be competition law.

Has this affected your clients?

In a move to align legislation to international standards, competition laws are gaining momentum across many countries.

For those of our clients who are considering pursuing a M&A deal in China, they will be advised (with the assistance of our associates in China) on the implications of the Unfair Competition Law, the Consumer Interests Protection Law, the Price Law, as well as China’s Anti-Monopoly Law. China’s AntiMonopoly Law came into force in August 2008 and allows Chinese authorities to implement a new merger-control regime consisting of formal guidelines and filing rules for both local and foreign companies.

Concentration reviews conducted by the Ministry of Commerce (MOC) are generally triggered by thresholds regarding the size of the businesses involved in a transaction, whether the deal takes place inside or Asian Legal Business ISSUE 10.2

Feature | M&A >>

Mergers and Acquisitions in 2010 with ALB outside China. MOC has power to approve, prohibit or impose conditions on an M&A deal. The Chinese government always maintains that the Anti-Monopoly Law is not meant to deter foreign investment.

Although such pre-merger procedures have, in several cases, affected transaction schedules, competition laws have, by and large, not really worked as a deterrence against foreign investment.

ALB: How has closing deals during the downturn differed from closing them in calmer times? An example here would be ideal.

LCC: During the downturn, due to the increase of distressed selling, we saw distressed company facing limited time frame and accelerated due diligence process.

Distressed M&A is also associated with limited representations and warranties from the vendor. Purchasers would also insist for a holdback amount on closing to prevent against losses that may arise from “hidden” encumbrances that may follow the assets. Purchasers that we represented had better bargaining power to request for specific quantitative material adverse change benchmarks to enable them to terminate the deal without any liability should the financial and business conditions of the target company deteriorate after the execution of the M&A agreement. Purchasers who were financially strong had also been able to get tighter vendor representations, warranties and indemnities supported by securities. In deals requiring external financing some of our clients were also able to bargain for an “escape” provision which allowed them to terminate the agreement in the event that financing could not be secured.

Currently, the focus will move away from distressed selling to strategic acquisitions.

We will see a more balanced approach in the legal process and documentation.

ALB: Location: Discussion of M&A in Asia is dominated by outbound PRC deals. What other jurisdictions are your clients interested in at the moment?

LCC: Our clients are interested in all jurisdictions (to name a few, Australia, Indonesia, Russia, and New Zealand), which www.legalbusinessonline.com

are not hostile to foreign investors, politically relatively stable, and having resources or strategic value for our clients to expand their existing business.

ALB: Structures & deal types: Some have foreshadowed more involvement from sovereign wealth funds and private equity in financing/acquisitions in 2010.

Do you agree with such assessments?

LCC: With the increasing availability of debt financing, especially so in China where the government supports local private equity funds to boost M&A activities, private equity buyers are able to secure loans to facilitate completion. However, in the light of the last global financial crisis, private equity buyers have been more cautious and certainly more concerned about earnings visibility.

The Chinese government’s recent decision to inject an additional $200 billion in its CIC sovereign investment fund is an indication that sovereign wealth funds may well become major M&A players again in 2010.

ALB: How are your clients structuring deals with a view to close the “valuation gap” and external funding problems?

LCC: To address the “valuation gap” issue, some of our clients have been adopting an “earn-outs” approach, namely, a deal structure which allows for contingent payments to be made upon future performance objectives. This effectively helps them in mitigating the risks associated with inaccurate valuations in a volatile market.

With the recovery of the stock markets, listed purchasers are also enthusiastic about offering new shares in satisfaction of the consideration payable to the vendors.

ALB: We’ve seen a rise in the number of hostile take-over bids in the West since 2H09. Do you see this sort of activity becoming prominent in Asia?

LCC: To date, most of the M&A deals in the Asian region are rather “friendly” in nature.

This may be a cultural thing. The Asians, especially the Chinese, aim to do things in a harmonious (和谐) manner. I don’t foresee many hostile take-over bids in the near future. Confrontations are frowned upon and not encouraged.

Loo & Partners LLP 88 Amoy Street Level Three Singapore 069907 Tel : (65) 6322-2288 Fax : (65) 6534-0833 Email : ccloo@loopartners.com.sg Website: www.loopartners.com.sg Loo & Partners LLP (Registration No. LL0800566K), registered with liability in Singapore under the Limited Liability Partnerships Act (Chapter 163A), was converted from the firm “Loo & Partners” to a limited liability partnership with effect from 28 May 2008.

45

Feature | M&A >>

SWFs (the woes of Temasek, the GIC and others have been documented widely) means that others see more of a role for private equity.

“Some sovereign wealth funds took a real battering during the crisis,” said Skadden’s Stone. “Now they are starting to come back, slowly, but we see private equity coming back more quickly – especially with the increased stability on equity markets plus the further availability of credit.”

In some M&A deals PE’s unique ability to add greater value to targets may see it favoured over traditional bank lending. “PE will always have a big role to play because it can add value to M&A deals that others can’t,” says Paul Weiss’ Chan. “In the current context we expect to see a number of domestic companies, be they in mainland China or elsewhere, teaming up with PE to go outbound…

“This is a very sound model as it not only adds the management knowhow, but also helps company’s tap private equity’s own exposure and often extensive networks.” And one shouldn’t forget that there are also a number of companies with the means to do deals under their own steam.

Many companies were quick to slash unneeded overheads in 2009 with the result being that company after company reported reduced revenue and profit that beat market expectations.

So much so that the cash pile of Standard & Poor’s 500 companies has grown by well over US$100bn since the Lehman bankruptcy.

And in Asia, Thomson Reuters figures show that Japanese companies

“With a few exceptions, hostile takeover activity has never really been a feature of the Asian M&A scene, given the prevalence of closely controlled corporations in many of Asia’s main markets” Robert Ashworth

Freshfields Bruckhaus Deringer 46

►► Legal Advisors to Asia-pacific M&A (ex Japan) 2009 (by deal value) Y/E 2009

Y/E 2008

Firm

Value (US$m)

Deal count

1

1

Linklaters

96,744

46

2

17

Freshfields

86,170

45

3

6

Allens Arthur Robinson

80,404

21

4

9

Freehills

75,734

56

5

10

Blake Dawson

70,964

45

►► Legal advisors to Asia-pacific M&A (ex Japan) 2009 (by deal count) Y/E 2009

Y/E 2008

Firm

Value (US$m)

Deal count

1

1

Baker & McKenzie

29,354

2

3

Freehills

75,734

56

3

8

Linklaters

96,744

46

Kim & Chang

11,809

46

Freshfields

86,170

45

4

7

5

17

63

Source: Mergermarket

raised a record US$57bn through follow-on offerings last year, with similarly impressive figures for companies in mainland China, Hong Kong and Korea. With plenty of cash to spend, little excess fat in the way of overheads to trim, and relatively slow macroeconomic growth in comparison to past years many companies will undoubtedly go after targets alone.

Strategic rather than financial deals will continue to be the most common, according to lawyers ALB interviewed, with competitive auctions becoming just as frequent. “Auctions will continue to feature prominently in the M&A landscape, whether as formal, well-defined bidding processes, or more informal auctions arranged by agents of the sellers,” said Freshfields’ Ashworth.

He notes that he expects hostile bids, while becoming increasingly common in Europe and US, will not take off in Asia in the year ahead. “With a few exceptions, hostile takeover activity has never really been a feature of the Asian M&A scene, given the prevalence of closely controlled corporations in many of Asia’s main markets.”

Bad times breed better deals Changes to deal structure, financing, documents and execution that have been forced upon dealmakers as a result of the financial crisis have actually seen more sound deals coming to market, according to Paul Weiss’ Chan. “The deals being done now are much better than those that were done during the 2007 heyday,” she says.

“Back then people did not have a lot of

time for execution – now there is a lot of lead time and deals are stronger as a result, because there is more focus on protection.”

This is nowhere more evident than in loan and deal documentation, according to Freshfield’s Ashworth.

“The first thing to disappear as a consequence of the financial crisis was covenant-light transactions,” he said.

“Banks had been prepared to lend with few borrower covenants, but the days of easy credit have now gone.

Sellers are insisting that buyers have financing secured prior to signing any contract. “The costs and risks now fall on the buyer. This means that very few deals that go to market would allow financing conditions or “financing out” to be included.”

One of the most salient trends in this regard is greatly shortened timeframes in which parties want deals executed.

“One way in which the downturn has impacted deal timetables is to shorten the period in which the buyers and sellers are prepared to take market risk,” argues Ashworth. “There is pressure from sellers in particular, for simultaneous signing and closing. This in effect means satisfying conditions upfront through pre-conditional structure, pre-packaged financing or increased pressure to waive or remove conditions from documents.”

Challenges 2010 may well be a year in which transactional activity across the region starts to pick up – but it is also set to be a challenging one for lawyers Asian Legal Business ISSUE 10.2

Feature | M&A >>

►►The growing importance of SWFs Unlike other institutional investors such as pension plans, many sovereign wealth funds do not have future liabilities that they are obligated to pay out on, and do not have external investors able to withdraw capital at short notice. As a result they have long-term investment horizons, and often are relatively free to invest in risky alternative investment types. With other investors struggling to cope with huge losses, SWFs represent a vital source of capital and have already provided much needed finance to firms such as Citigroup and Credit Suisse.

challenging to run an M&A practice,” said Skadden’s Norris. “M&A lawyers will have to try and anticipate where the work is going to develop and continue to stay on top of the corporate drivers behind M&A in the region – which sectors and industries their clients will be targeting. ALB

“The markets picked up quite well in the second half of 2009 and from what we can see, a lot of companies have met their capital raising requirements and strengthened their balance sheets” Jonathan Stone

Skadden

in Asia. From navigating truncated execution schedules to ensuring that document control is achieved, M&A lawyers will need to ensure that they keep their collective ear to the ground for any opportunities that may develop – as well as for any broader macroeconomic changes.

“2010 is looking a like a busy year for M&A lawyers in Asia, but it will also be a year in which it will be

Worldwide recognition for Asia’s legal excellence 4 June 2010, Ritz Carlton, Millenia Singapore South East Asia’s premium law awards returns to Singapore in June 2010. The event is the culmination of months of intensive research and gathers hundreds of legal industry professionals from all around the region. The biggest night on the industry calendar honours the achievements and successes of the past twelve months in a spirit of celebration and collegiality.

• Sumptuous gala dinner, free flowing wine and beer • Southeast Asia’s leading investment bankers, solicitors, inhouse counsel, barristers, judiciary and business leaders • Winners announced and invited on stage to collect their awards • Live entertainment Award Sponsor

Supporting Official Organised Organisation publication by

Please contact Iris on iris@kmimail.com or +852 2815 5988, if you would like more information with regard to nominations.

www.legalbusinessonline.com

47

Feature | interview >>

In-house perspective

Jaclyn Jhin, Morgan Stanley

Hong Kong In-House Lawyer of the Year Jaclyn Jhin, COO and CRO of global capital markets Asia at Morgan Stanley, is testament to the fact that women can be high achievers professionally while successfully raising a family. Not that it’s easy…

48

►► Jaclyn Jhin deal highlights

• bank’s first dual listing on ASX and SGX by an Australian issuer – SP Ausnet • bank’s first Singapore Listed Infrastructure Business Trust – City Spring • bank’s first Reg S secondary listing in Hong Kong of an Australian issuer – Sinogold • bank’s first Korean rights issue – KB Financial Group • largest ADR offering by an Indian issuer – Sterlite’s US$1.8Bn ADR IPO • high-profile Hong Kong IPO of Alibaba • largest rights issue in Singapore – DBS • US$1bn 10-year senior notes issuance of Hong Kong and China Gas Company

A

s Morgan Stanley settles into its new Asia Pacific regional headquarter in the International Commercial Centre – Hong Kong’s newest landmark skyscraper that is soon to be the city’s tallest – Jaclyn Jhin is stepping up to a new career high.

Jhin has been promoted to be Morgan Stanley's chief operating officer and chief risk officer of global capital markets (GCM) Asia from her previous position as an executive director and the bank’s legal and compliance head.

The promotion came just a couple of months after she was awarded the ‘Hong Kong In-House Lawyer of the Year’ at the 2009 ALB Hong Kong Law Awards last September. Both events mark the highlights of her career.

“Winning the award was a sign that I’ve reached the pinnacle of being an in-house counsel. I was so thrilled by that award,” says Jhin. “It’s like the icing on the cake, showing that my peers have recognised me for what I’ve done and accomplished during the five years of being a GCM lawyer.

It also marks a perfect time for me to try something new, and face new challenges.” When the new position was offered, she grabbed it.

Jhin says the growing sophistication of the legal environment and maturing markets in Asia are the main reasons for the creation of the combined position. “As a result of the firm's recognition of the tremendous growth in Asia, the need to have a dedicated CRO and COO in place has never been greater,” she says.

With her five years of in-house experience covering GCM, she is undoubtedly equipped with the right skill set. “My in-house legal experience Asian Legal Business ISSUE 10.2

Feature | interview >>

is extremely helpful to the CRO role.

The organisational skills and team work mentality I developed from my previous position are also relevant in my current role as the COO. But as the COO, I have to think of what's good for the group and think in more ‘macro’ terms, as well as hold a more forwardthinking and long-term view of the department and its goals.”

Using inspirational quotes is one way Jhin often motivates herself – and others – to reach higher. One of her favourites, which she associates with the in-house counsel role, is from Henry Ford: ‘Most people spend more time and energy going around problems than in trying to solve them’.

“I agree with Mr Ford. I believe a successful in-house lawyer should understand the needs of their business unit or client, be part of the business

more closely and quickly with senior management to identify, analyse and address new risks associated with the new products,” says Jhin.

Fortunately, she has many external counsels she can call up for a “sanity check” on certain issues, often free of charge, and she recognises the importance of this. “If you don’t have a good relationship with external counsel, then it makes it more difficult to get immediate access when you need it most. I always make a point to meet frequently to discuss current market trends, regulatory issues, and issues that in-house counsel are most concerned with, and to provide feedback on legal services provided by a specific firm. I think it is important to learn from each other.” Jhin will continue to do so since she will be working closely with external counsel

“I always make a point to meet with them [external counsel] frequently to discuss current market trends, regulatory issues, [and] issues that in-house counsel are most concerned with” team, and try to assist the team in finding viable solutions to achieve its goals,” says Jhin. “As legal counsel, we need to give advice and views instead of saying ‘no’ or regurgitating the law and regulations. Our role is to help our internal clients think through the issues and try to come up with solutions or alternatives.”

A prime example of this came through the financial crisis. Jhin had to assist bankers with numerous inquiries from clients in respect to convertible bonds and share buybacks and in executing debt-consent solicitations and exchange offerings.

“It has been a stressful period for everyone. We were not very familiar with these ‘liability management’ structures, so it was a learning curve for the legal team. The deterioration in the market required us to work even

Mini Bio of Jaclyn Jhin

• Korean American

• Graduated from University of Pennsylvania Law School in 1994 • Worked at a Wall Street law firm in New York as a junior associate after graduation

1994-1996 www.legalbusinessonline.com

in her CRO role. Most of the external counsel she works with are from firms that Morgan Stanley has a relationship with, as well as partners who have moved on from those firms.

Juggling work-life balance

“Anyone who says it’s easy to juggle work and family is either lying or is not doing a good job either at work or at home. It’s definitely not easy and you have to work at it.” Jhin says. She had to overcome the biggest challenge in her career when she went back to law after almost four years raising her two young children. The perception of mothers with young kids became an obstacle to even getting a junior associate role, and the memory of being rejected is still vivid. “You have young kids, so just stay at home. Moms with young kids are just not committed to

• Took four years off to raise two children

1996-2000

• Joined Milbank Tweed in Hong Kong as an associate

2000

►►Quick facts of Morgan Stanley GCM Asia (ex-Japan) • Number of staff: over 60 • Offices in Hong Kong, Singapore, Australia, India and Korea • For 2009, it was ranked number 1 in terms of market share for equity and equity linked products (according to Bloomberg) • In 2009, it did over 50 equity and equity linked deals (according to Bloomberg)

working hard,” one male partner told her at the time during a job interview.

Milbank Tweed, however, saw the potential in Jhin, and when she joined the firm in Hong Kong as an associate in 2000, her career took off. She was involved in various types of deals – from debt offerings in the Philippines to private equity transactions in Korea. Anthony Root, the head of Milbank’s corporate practice in Asia and the managing partner of the Beijing and Hong Kong offices, was Jhin’s mentor, and Jhin still goes to him for career advice.

“It was difficult in the beginning as I was the oldest second-year associate at that time. I felt that I had to prove myself to everyone. But having a good role model – a mentor – helped me survive the hardship, and I enjoyed working at Milbank,” Jhin says. A lot of travelling, however, meant that sometimes she would not see her children for weeks at a time, and as a result Jhin decided to join Morgan Stanley as an in-house lawyer in 2004.

The role doesn’t require her to travel, but in no way is it less demanding or intellectually challenging. By building a strong, trust-based relationship at work she has been able to enjoy a certain level of job flexibility. “The bankers that I work with have been very understanding and accommodating when I need to take some time off for family reasons, because they know that at all other times I am always responsive and hardworking,” she says. ALB

• Joined Morgan Stanley as an in-house lawyer in 2004, covering global capital markets in Asia (ex-Japan)

2004

• Awarded the Hong Kong In-House Lawyer of the Year award at the 2009 ALB Hong Kong Law Awards in September 2009

Sep 2009

• Promoted to Morgan Stanley’s chief operating officer and chief risk officer of global capital markets (GCM) Asia in October

Oct 2009

49

profile | managing partner >>

alb/Aderant 2010 managing partnerS series

Helen Yeo – Rodyk & Davidson:

View from the top Life changes when you reach the summit. Helen Yeo shares her perspective on a life spent as lawyer, managing partner and grandmother

H

elen Yeo has a serious case of wanderlust. It was her desire to travel that inspired the regional growth of her first firm, HelenYeo & Partners. “If you asked me what was the one trademark characteristic of [the firm], even during those early days, I would say without hesitation that it was our regional expansion,” she says. “From the beginning I led a drive to build a regional practice and that has served us well.”

She doesn’t hesitate to admit that this drive for regional expansion was borne out of romantic ideas of conquering the ‘wild, wild East’. “I realised that [Vietnam] was a place

that you could do almost anything, of course within keeping to laws, which were few then. It was like a situation of being given a blank page for you to write on,” she says enthusiastically.

“They had no law firms [in 1992] … in those early days of Vietnam opening up, business people were all very eager to invest, but this being a new frontier, information and clarity were scarce.”

By the time HelenYeo & Partners was established in July of 1992, Yeo had already made her mind up to take the firm beyond Singapore.

Conquering regional expansion

At the time and with the strength of her own firm behind her, Yeo rode the

“Rodyk has the luxury of having long-established areas of work which are not headline grabbers but are always busy and profitable, irrespective of recession” 50

wave of economic expansion occurring in Singapore, launching offices in Hanoi, Yangon and Ho Chi Minh City. In 1996 the firm became the first Singaporean law firm to open a licensed branch office in Shanghai.

China would become Yeo’s next area of focus. “In 2000 and after feeling the constraints from the size of our firm, we decided to concentrate on China – even though our Shanghai office was not yet profitable,” she says.

“This strategic decision was premised through my belief (held since the mid-1990s) that we would eventually reap the benefits of Chinese companies coming to South-East Asia.”

Despite the success of her firm, the hunt for solutions led Yeo to a merger with Rodyk & Davidson, taking effect in November 2002. Since her appointment as managing partner of the merged firm, Yeo has continued to push for further expansion. She currently sees opportunities coming Asian Legal Business ISSUE 10.2

| managingpartner profile profile| managing partner>> >>

www.legalbusinessonline.com

51

profile | managing partner >>

►► Snapshot of Rodyk Offices

Number of partners + lawyers

Singapore 116

Number of partners

Number of lawyers (excluding partners)

59

57

Shanghai

11

2

10

Jakarta*

2

0

2

India*

1

0

1 *associated office

out of China and Indonesia in relation to arbitration work.

Rodyk & Davidson has also established a strong Indonesian practice which focuses on matters relating to coal mining, power plants and other infrastructure projects.

“The coal industry has flourished in Indonesia over the past few years, and our Indonesian practice has grown in tandem,” Yeo says. Additionally, the firm is also looking to develop its Indian practice.

Contemporary plans

As Singapore’s oldest law firm, regional expansion is only one aspect of the future development of Rodyk & Davidson. Part of Yeo’s role involves transforming Rodyk’s enduring legacy into one which is contemporary. In reality, this also means balancing the firm’s profitability with the needs of its most valuable resource: lawyers.

Yeo achieves this by deliberately maintaining a streamlined team to manage both cost and quality.

“We have always kept a lean team, and this prudence paid dividends in the downturn,” she says. “We reacted rapidly and this nimbleness meant that we didn’t even have to consider laying people off. We have no borrowings and expansion has always been financed by our own cash-flow.”

Of course, a lean team is beneficial in times of economic hardship – but what about during a boom? Yeo is quick to point out that workflow

is always managed appropriately.

“Despite the volume of work that we have, we are able to keep down headcount because of good IT infrastructure and support, and efficient back-office services, processes and systems,” says Yeo. The firm has also been fortunate enough to see a steady flow of business through the door, in spite of the downturn. “Rodyk has the luxury of having long-established areas of business which are not headlinegrabbers but are always busy and profitable, irrespective of recession.

These include defense of claims against medical centres and practitioners, defending personal injury claims and property development project sales, which have three- to four-year life cycles,” says Yeo. Throughout the turbulent year that was 2009, Yeo maintained a positive outlook. During the downturn, Rodyk’s partners also focused on billing and fee collection to ensure that any bad debts were minimised. “By November 2009, only 1% of our 2008 bills remained unpaid – a pretty good achievement in a recession year,” she says.

And instead of restricting spending, Yeo increased entertainment budgets and encouraged partners to spend more time with their clients. The firm also made a surprise move and invested in software by purchasing Microsoft Office 2007 – at a time when most other firms were implementing cost cuts. The moves were wise, made with the intention of preparing Rodyk for more prosperous times.

Juggle it all

Yeo’s career trajectory has pushed her through the glass ceiling and landed her at the forefront of two law firms in Singapore. Although firms are now pushing for gender equality, a working mother in the upper echelons of management is still seen somewhat as an anomaly. “Being pragmatic, I recognised that in some areas of work

“Despite the volume of work that we have, we are able to keep down headcount because of good IT infrastructure and support, and efficient back-office services, processes and systems” 52

there is a glass ceiling for working mothers, due to practical reasons such as when the nature of the job calls for endless extreme hours,” says Yeo. Yet not only is she pragmatic, she is also frank about her journey to the top of her career. “I have never subscribed to the view that women can have it all,” she says. “Though I have worked hard at building my career, it was never as hard as it could have been if I did not have to bring up three children too. I never felt I had to sacrifice family time beyond a certain limit.”

Having lived the reality of juggling a family of five and a law firm with 130 lawyers, Yeo puts her money behind her firm’s talent. The managing partner encourages flexible working arrangements that enable working mothers to make their own hours to suit their parenting needs. “I hold the firm belief that our priority is to achieve work-life balance, but when push comes to shove, family should come first. There were times I advised several partners with young families that they had to let go of some work,” she says.

Reflections

Nevertheless, Yeo is nearing the end of her term as managing partner at Rodyk and is contemplating the possibility of slowing down. “I like work, I like working and hard work doesn’t bother me. But of course, at this stage of my life – I am 59 with grandchildren – I am also looking at slowing down my pace” she says.

“I don’t think I am at the top of the hill but I am close to the top and have the advantage of looking down at the whole landscape below me. It is a different perspective and feeling from being a young mother climbing up from the bottom of the hill with a very limited view, juggling clients’ and bosses’ expectations, and colleagues and staff, while also figuring out what are measles or chicken pox.”

Now the hardest part of her journey is over, Yeo is getting restless for her next adventure. Work-wise, 2010 will be filled with preparations for the firm’s 150th year celebrations, to be kicked off in January 2011. Personally, Yeo is once again looking to satisfy her love of travel and has planned trips to Mongolia, Turkey and Tuscany. ALB Asian Legal Business ISSUE 10.2

FEATURE | Mauritius >>

Offshore firms: Going for BRIC

Offshore law firms around the world have their eyes on a potentially huge client base in the BRIC nations, but Mauritius is coming to the fore as a favourable channel of investment

O

n the list of the world’s most popular offshore financial centres (OFCs), the British Virgin Islands (BVI), Cayman Islands and Bermuda feature prominently. Yet over the last year law firms have moved into other offshore financial centres – notably Mauritius.

Is this going to be a new growth area for lawyers and law firms in 2010?

BRIC radar

As corporations look to offshore jurisdictions to achieve tax efficiency for their investments, firms like Conyers Dill & Pearman and Appleby are keeping the BRIC markets in mind. The firm is servicing investors in Russia through Cyprus, and investors into India and China through Mauritius. It has recently launched offices in Brazil (December 2008), and Mauritius (June 2009), and has formed an alliance with a Cypriot firm (November 2009).

Last year Appleby, meanwhile, became the largest offshore firm by partner numbers after it merged with the Isle of Man’s Dickinson Cruickshank in July. The firm also opened an office in Mauritius, among several other expansionary moves it made in 2009.

Mauritius

Mauritius is India’s largest foreign investor and the most attractive offsfhore gateway to one of the world’s fastest growing economies. The island nation is the offshore centre of 54

Asian Legal Business ISSUE 10.2

FEATURE | Mauritius >>

choice for Indian entrepreneurs, so it’s not surprising that law firms are exploring a growth market there.

Mauritius’ growing investment rates are staggering: between 2000 and 2009 almost half of all foreign direct investment in India was routed through Mauritius (US$35bn of the total US$81bn – see boxout, right). In part, this is largely due to the Double Taxation Avoidance Agreement (“DTAA”) Mauritius has signed with many countries, including India and China.

The head of Conyers Dill & Pearman’s Mauritius office, Craig Fulton, says that although the island is not viewed as a ‘traditional’ offshore jurisdiction, combining the DTAA with a strong legal system and a diversified economy gives Mauritius certain advantages. “There are definite advantages compared to the traditional offshore jurisdictions that cannot mitigate any tax implications in the ultimate country of investment,” he says. “In Mauritius, treaties allow capital gains to be taxed in the seller’s country of residence. Mauritius doesn’t impose tax on capital gains derived by a GBC1 (or ‘tax resident’ such as a Mauritian-incorporated company), nor levy any withholding tax on any gains, dividends or interest derived by an investor from a GBC1.”

Capitalising on the growing number of investors in the Middle East may also be easier for firms located in Mauritius. “While Mauritius has more commonly been used as an investment platform for FDI … into Asian economies, there is now significant investment being made by Asian investors into places such as Africa,” Fulton says. “With its network of treaties, Mauritius is often well placed to facilitate investments both ways.”

It’s for these reasons that the island is often regarded as the world’s Craig Fulton ideal tax haven, but that Conyers Dill & Pearman advantage could also be a problem, at least in terms of the country’s relations with India. Following fallout from the www.legalbusinessonline.com

financial crisis and during an Indian election year, the Indian government has said that it may revise (and potentially abolish) the DTAA in a bid to crackdown on corporate tax evasion. The Mauritian government is reportedly in negotiations with the Indian government about reviewing these proposals.

Isle of Man

Trouble in Mauritius may well provide an opportunity for other OFCs to shine. Although it doesn’t have an official tax treaty with any Asian country, the Isle of Man (IOM) is competing with the more popular financial centres for its share of the global market. IOM has an AAA rating from Standard & Poor’s and Moody’s, but another good reason to invest there is its inclusion in the OECD’s White List. According to Mike Edwards, a Singapore-based partner at offshore firm Cains, the Isle of Man’s appeal can be attributed to its favourable regulatory and fiscal environment. “[It] is able to offer ‘products’ which are equal to, or better than, the offerings from other offshore jurisdictions,” he says. “Companies can be incorporated quickly and there is no requirement to obtain pre-incorporation approval from any government regulator. Directors and shareholders may be of any nationality and reside anywhere in the world and there is no requirement for [the] board or general meetings to be held in the Isle of Man.” What distinguishes IOM from other offerings for Asian clients is the access it affords to the European market, via London’s stock exchange. Indian and Chinese enterprises are incorporating in the Isle of Man and listing on the Alternative Investment Market (AIM) – providing a gateway to Europe.

“India is a key jurisdiction so far as the Isle of Man is concerned,” says Edwards. “Seventy five per cent of the Indian businesses listed on AIM in London have done so via Isle of Man companies. Consequently, the use of an Isle of Man holding company

►► FDI IN INDIA: APRIL 2000-NOV 2009 Rank

Country

TOTAL (US$m)

% of total inflows

1

Mauritius

45,241

2

Singapore

9,387

9

3

US

7,845

8

44

4

UK

5,596

5

5

The Netherlands

4,282

4

6

Japan

3,565

4

7

Cyprus

3,527

3

8

Germany

2,654

3

9

UAE

1,476

1

10

France

1,466

1

Source: Department of Industrial Policy & Promotion, Ministry of Commerce and Industry, India

55

FEATURE | Mauritius >>

has become the norm.”

IOM-based Cains has been following the trend of Indian corporations investing in Europe via the Isle for a number of years. He has provided Mike Edwards advice for the KSK Cains Power Venture, Unitech Corporate Parks, Promethean India, Dhir India Investments and DQ Entertainment.

“The Isle of Man is in a very favourable time zone for London and its capital markets upon which a number of Asian clients rely,” says Nick Verardi, who heads the corporate and commercial team in Appleby’s Isle of Man office (formerly Dickinson Cruickshank). “By using an Isle of Man vehicle as a holding company in a structure that may be ultimately listed on a stock exchange in the West, Asian clients are able to ensure that no tax is paid at the top of the corporate structure. At the same time [this] provides freedom to move capital around the group without incurring Isle of Man tax,” he explains.

For example, after establishing its IOM investment vehicle Hirco in 2006 the Indian property developer Hiranandani launched an IPO on the AIM and raised £362.6m. Hirco’s listing was later followed by the Japanese insurer Tokio Marine Bluebell which set up in 2007.

While both Verardi and Edwards say Asian interest in the IOM will grow, it’s clear the Manx government will need to increase its efforts to lure more investment.

Edwards says that the government is increasing its promotional activities in Asia, and part of that is about continuing its current efforts.

“We believe that the way forward for the Isle of Man lies in adding value, rather than being seen to be predatory of other jurisdictions’ taxbase, and assisting Indian businesses to raise funds internationally is an example of that added value,” he says. That means the Isle of Man will be competing with Mauritius for its share of BRIC clients. But Verardi, whose firm now has offices in both IOM and Mauritius, doesn’t see it as a competition.

56

“What Mauritius offers is strong, but in a different way from IOM. [It] has a number of its own advantages, in particular the double taxation agreements with a number of Middle and Far East countries, and a cultural alignment to those geographic areas,” he said. “However, the Isle of Man offering has both the proximity to the city of London and the time zone, two factors which cannot be easily underestimated.” ALB

“The Ise of Man is in a very favourable time zone for London and its capital markets, upon which a number of Asian clients rely”

“We believe that the way forward for the Isle of Man lies in adding value, rather than being seen to be predatory of other jurisdictions’ tax-base, and assisting Indian businesses to raise funds internationally is an example of that added value”

Craig Fulton

Conyers Dill & Pearman

Mike Edwards

Cains

Asian Legal Business ISSUE 10.2

Firm Profile

Appleby

Appleby: a year of growth

2

009 was arguably a year of growth for offshore firm Appleby. In the last twelve months not only did it become the largest offshore firm by partner numbers (after its October merger with Dickinson Cruickshank), Appleby also grew from an eight-office firm to eleven offices. In 2009 the firm launched offices in Seychelles (June), Bahrain (July), and more recently, will open in Guernsey (Spring of 2010). The addition of the Isle of Man and Mauritian legal services offers to bridge the Asian market with the European market.

Chinese and Indian corporations will be able to benefit from Appleby’s presence on the Isle of Man (through Dickinson Cruickshank’s long presence on the island).

Nick Verardi, a partner based in the Isle of Man, says there is a growing trend seen among Chinese corporates who are following India’s path to Europe via the Isle of Man. “In the same way that Indian companies have seen the Isle of Man as a gateway to Europe, China will also appreciate the offering,” he says. “There is no reason why Chinese companies could not see the same opportunity.”

Appleby has assisted Asia-based companies through to the European markets from the Isle of Man office. These include China Central Properties on its 2007 US$300m IPO on the AIM, Speymill Macau Property on its 2006 US$80m IPO on the AIM, and Indian media company UTV Motion Pictures (US$70m IPO).

Going forward, the firm’s Hong Kong office will be a key jurisdiction for these transactions.

“The advantage of having a Hong Kong office cannot be underestimated, since it gives the Isle of Man an opportunity and platform into China and Asia, allowing the jurisdiction to increase the profile of the island generally,” says Verardi.

Better service Having finalised its merger, Appleby aims to bridge its service seamlessly around the world. “One of the most important offerings to our clients is that we can run multijurisdictional transactions as a global firm and provide one single invoice at the end of the instruction,” explains Verardi.

“We believe that in a global world, the client finds this helpful – not only from the point of view of consistency and quality of advice, but also practically, in that it saves the client time and hopefully, at the end of the day, costs.”

For Asia-based clients, these expansion strategies are significant steps forward to providing a broader service globally. www.legalbusinessonline.com

Appleby can specialise its advice and provide independent and impartial guidance in the world’s important offshore financial centres – “certainly an advantage in Asia where there is a high consumption of offshore transactions” comments Woo. By being the only global offshore firm with a base in the Isle of Man, the merger has also increased Appleby’s focus on the Asian markets.

“The merger itself has allowed us to focus on the Asian markets by being able to educate the remainder of the Appleby group across all the jurisdictions – to better understand Isle of Man products including companies, funds, trusts, and so on,” says Verardi.

Our presence in Seychelles from June 2009 provides further opportunities to clients in Asia and the Indian Sub Continent for business opportunities to and from African.

Currently, Seychelles has favourable Double Taxation Avoidance Treaties (DTAAs) with five Asian countries with accumulated capital flows to the value of USD 1.6 billion by 2008.

This has been achieved through the use of the Seychelles Special License Companies.

Seychelles has emerged as a favourable jurisdiction being listed on the OECD ‘White List’ and has 70,000 plus companies on its register as at 2009. This together its International Trust business and the recent launch of its Mutual Funds and Foundations legislations has further broadened its use as an offshore financial centre.

Continued growth in its DTAAs will be integral to Seychelles’ strategy as it considers the significant developing opportunities from the Asian region.

Meanwhile, in Mauritius the firm services a range of international clients focusing on investments between the African and Asian markets. These include Lehman Brothers on the insolvency proceedings relating to its Mauritian entity, Lehman Brothers Opportunity Ltd, Sodexo SA on its purchase of Radhakrishna Hospitality Services, and Intelsat on its US$250m investment into telecommunications services in Africa. The benefits of doing business through Mauritius are numerous, as the country is advantaged by its string of favourable Double Taxation Agreements between countries in Asia and Africa. The island is on the OECD’s White List and its favourable regulatory environment has seen over 400 investment funds incorporated there in the last few years.

Mauritius has focused the development of its global business sector on the use of

its growing network of Double Taxation Avoidance Treaties (DTAAs). This expanding network reinforces Mauritius as a taxefficient jurisdiction for those investors and companies structuring investments abroad.

While offshore financial centres around the world have been affected by the financial crisis, Appleby continued to grow during the downturn and is confident about market recovery. With bases in eight offshore financial centres approved on the OECD White List, and over 800 lawyers and professionals on hand, the firm offers a broad range of advisory services, from issues in corporate and commercial transactions, litigation and insolvency, to private client and trusts and property.

For more information, contact the Appleby partners below:

Frances Woo

Malcolm Moller

Nick Verardi

Frances Woo, managing partner Hong Kong fwoo@applebyglobal.com D: +852 2905 5720

Malcolm Moller managing partner Mauritius and Seychelles mmoller@applebyglobal.com D: +230 203 4301

Nick Verardi local group head corporate & commercial, partner - Isle of Man nverardi@applebyglobal.com D: +44 (0)1624 647 648

57

market data | capital markets >>

Equity Capital Markets TRANSACTIONS List

Asia, inc Japan, ex Australia & New Zealand Jan 10 - Feb 6 Issuer

Proceeds (USDm)

Issue date

Currency

Bookrunner(s)

Sector

Hong Kong Esprit Holdings Ltd

600.4

04/02/10

HKD

UBS Ltd

Consumer Staples

Tianjin Port Dvlp Hldgs Ltd

318.0

12/01/10

HKD

China Intl Trust & Investment; Bank of America Merrill Lynch; Morgan Stanley & Co

Industrials

China Shineway Pharm Grp Ltd

191.0

12/01/10

HKD

Goldman Sachs & Co

Healthcare

Goldlok Toys Holdings Co Ltd

122.4

18/01/10

CNY

Pingan Securities Co Ltd

Consumer Products and Services

TCC International Holdings Ltd

109.2

14/01/10

HKD

BNP Paribas (Hong Kong)

Materials

Winbox Intl(Hldgs)Ltd

90.0

15/01/10

HKD

UBS

Consumer Staples

China Oil & Gas Group Ltd

80.5

25/01/10

HKD

Deutsche Bank (Hong Kong)

Energy and Power

CASIL

74.8

04/02/10

HKD

CITIC Securities

Industrials

Daphne Intl Hldgs Ltd

50.0

11/01/10

HKD

Deutsche Bank (Hong Kong)

Consumer Staples

Xiwang Sugar Holdings Co Ltd

43.7

18/01/10

HKD

China International Capital Co

Consumer Staples

Bestway Intl Hldgs Ltd

38.6

19/01/10

HKD

Peace Town Securities Ltd

Materials

Dragon Hill Wuling Auto Hldg

34.5

21/01/10

HKD

SBI E2-Capital Securities Ltd; Celestial Securities

Industrials

Jia Sheng Holdings Ltd

34.4

19/01/10

HKD

Guotai Junan Securities (HK)

Financials

Loudong General Nice Res

32.4

15/01/10

HKD

Enlighten Securities Ltd

Energy and Power

New Times Energy Corp Ltd

29.7

19/01/10

HKD

Pelican Securities Ltd

Materials

Jackin International Holdings

25.7

13/01/10

HKD

Oriental Patron Asia Ltd; China Everbright Securities

High Technology

JLF Investment Co Ltd

21.5

18/01/10

HKD

Shareholder

Consumer Staples

China Chief Cable TV Group Ltd

20.1

27/01/10

HKD

Cheong Lee Securities Co Ltd

Media and Entertainment

Reliance Industries Ltd

766.6

11/01/10

INR

UBS Investment Bank

Energy and Power

Yes Bank Ltd

225.5

20/01/10

INR

Morgan Stanley; CLSA; Goldman Sachs & Co

Financials

Jaiprakash Power Ventures Ltd

200.0

27/01/10

USD

Standard Chartered Bk (India)

Energy and Power

Shriram Transport Fin Co Ltd

126.2

28/01/10

INR

Citi; Bank of America Merrill Lynch; IDFC-SSKI Ltd

Financials

Greenko Group PLC

116.5

27/01/10

British Pound

Arden Partners Ltd

Energy and Power

Usha Martin Ltd

Materials

India

102.6

18/01/10

INR

Edelweiss Capital

Jubilant FoodWorks Ltd

71.0

21/01/10

INR

Kotak Mahindra Capital Co

Retail

Infinite Computer Solutions

40.9

27/01/10

INR

SPA Merchant Bankers; Indiainfoline Ltd

High Technology

SpiceJet Ltd

36.0

05/02/10

INR

DSP Merrill Lynch Ltd

Industrials

Infomedia 18 Ltd

21.8

15/01/10

INR

ICICI Securities & Finance Co

Media and Entertainment

Indonesia Energi Mega Persada Tbk PT Benakat Petroleum Energy

528

13/01/10

IDR

Danatama Makmur; Madani Securities

Energy and Power

172.3

02/02/10

IDR

Danatama Makmur

Energy and Power

Darma Henwa PT

68.1

11/01/10

IDR

Danatama Makmur

Materials

Pembangunan Perumahan PT

62.3

01/02/10

IDR

PT Mandiri Sekuritas; Danareksa Sekuritas; DBS Vickers Sec Indonesia PT

Industrials

Sumitomo Mitsui Finl Grp Inc

11,058.4

20/01/10

JPY

Nikko Cordial Securities Inc; GSJCL; Daiwa Sec Capital Markets; Nomura Securities

Financials

Square Enix Holdings Co Ltd

395.7

18/01/10

JPY

Nomura International PLC

High Technology

Shizuoka Bank Ltd

263.5

18/01/10

JPY

Nomura Securities

Financials

Daikyo Inc

211.8

18/01/10

JPY

Mitsubishi UFJ Securities Co

Real Estate

Ulvac Inc

194.5

19/01/10

JPY

Nomura Securities

Industrials

Japan Prime Realty Investment

166.9

01/02/10

JPY

Mizuho Securities Co Ltd; Merrill Lynch Securities Co

Real Estate

Meiko Electronics Co Ltd

40.1

25/01/10

JPY

Nomura Securities

High Technology

JAFCO Co Ltd

36.1

03/02/10

JPY

Nomura International PLC

Financials

Take And Give Needs Co Ltd

27.6

25/01/10

JPY

Daiwa Sec Capital Markets

Consumer Products and Services

Japan

Malaysia Mudajaya Group Bhd

53.1

21/01/10

MYR

CIMB Investment Bank Bhd

Industrials

CVM Minerals Ltd

13.0

01/02/10

HKD

Athens Capital Ltd; Cinda Intl Capital Ltd

Materials

328.9

14/01/10

PHP

Deutsche Bank (Hong Kong)

Energy and Power

Tiger Airways Holdings Ltd

178.6

15/01/10

SGD

Citigroup Global Markets Asia; Morgan Stanley & Co. Intl plc

Industrials

Avago Technologies Ltd

435.3

27/01/10

USD

Deutsche Bank Securities Corp; Barclays Capital; Morgan Stanley; Citi

High Technology

Frasers Centrepoint Trust

129.7

27/01/10

SGD

DBS Securities Singapore Pte; Citi

Real Estate

Otto Marine Ltd

67.8

26/01/10

SGD

Kim Eng Securities Pte Ltd

Industrials

Ryobi Kiso Holdings Ltd

36.0

18/01/10

SGD

UOB Kay Hian Private Ltd

Industrials

Sin Heng Heavy MachineryLtd

31.2

25/01/10

SGD

DBS Bank Ltd

Industrials

Philippines First Gen Corp Singapore

South Korea 139.7

18/01/10

KRW

Korea Investment & Securities

Materials

Bongshin

Lock&Lock Co Ltd

43.8

21/01/10

KRW

Woori Invest & Sec Co Ltd

Industrials

SETi Co Ltd

28.6

22/01/10

KRW

Samsung Securities

High Technology

Youngheung Iron&steel Co Ltd

24.0

14/01/10

KRW

Daewoo Securities Co Ltd

Industrials

Nexus Investment Corp

23.5

29/01/10

KRW

HI Investment & Securities Co

Financials

Lotte Tour Development Co Ltd

22.3

28/01/10

KRW

Woori Invest & Sec Co Ltd

Industrials

28.7

19/01/10

TWD

Fubon Securities Co Ltd

Industrials

Taiwan Kenmec Mechanical Engineering Thailand CP ALL PCL Indorama Ventures PCL

58

49.6

15/01/10

THB

Credit Suisse

Retail

123.8

23/01/10

THB

Bualuang Securities Co Ltd

Financials

Asian Legal Business ISSUE 10.2

market data | capital markets >>

DEBT CAPITAL MARKETS TRANSACTIONS LIST

Asia, inc Japan, ex Australia & New Zealand Jan 10 - Feb 6 Issuer

Proceeds (USDm)

Issue date

Currency

Bookrunner(s)

Sector

Hong Kong Fita International Ltd

500.0

03/02/10

USD

HSBC Holdings PLC; JP Morgan; Morgan Stanley

Financials

Noble Group Ltd

413.6

04/02/10

USD

Goldman Sachs & Co

Consumer Staples Energy and Power

India IOC

498.5

14/01/10

USD

Deutsche Bank AG; HSBC Holdings PLC; Standard Chartered Bank AG

Export-Import Bank of India

299.0

26/01/10

USD

Citi; Deutsche Bank AG

Financials

Bank of India

218.1

20/01/10

INR

Standard Chartered Bk (India)

Financials

SBI

217.2

25/01/10

INR

Axis Bank Ltd; AK Capital Services Ltd; Edelweiss Capital; Deutsche Bank AG; ICICI Bank Ltd; ICICI Sec Primary Dealership; Kotak Mahindra Bank Ltd; Sec Trading Corp of India; Trust Investment Advisors; Yes Bank Ltd

Financials

IRFC

165.3

03/02/10

INR

Barclays Bank PLC

Financials

1,980.9

12/01/10

USD

Barclays Capital; Citigroup; Credit Suisse

Government and Agencies

Bank of Tokyo-Mitsubishi UFJ

1,999.5

13/01/10

USD

Bank of America Merrill Lynch; Morgan Stanley; Mitsubishi UFJ Sec Intl Plc

Financials

Mizuho Corporate Bank Ltd

1,328.8

21/01/10

JPY

Mizuho Securities Co Ltd

Financials

JBIC Govt Gtd

1,246.7

25/01/10

USD

Bank of America Merrill Lynch; Deutsche Bank Securities Corp; JP Morgan

Financials

Daiwa House Industry Co Ltd

1,113.5

22/01/10

JPY

Daiwa Sec Capital Markets; Mitsubishi UFJ Securities Co; Mizuho Securities Co Ltd

Real Estate

Japan Housing Finance Agency

1,037.4

21/01/10

JPY

Nomura Securities

Government and Agencies

Nissan Motor Acceptance Corp

996.0

20/01/10

USD

Bank of America Merrill Lynch; Citi; Deutsche Bank Securities Corp

Financials

NMOTR 2010-A

900.0

28/01/10

USD

RBS; Bank of America Merrill Lynch; Barclays Capital

Financials

Toshiba Corp

771.4

15/01/10

JPY

Nomura Securities

High Technology

Japan Finance Corp

561.8

05/02/10

JPY

Nomura Securities; Mizuho Securities Co Ltd; Mitsubishi UFJ Securities Co

Government and Agencies

Japan Expressway Holding

551.4

01/02/10

JPY

Daiwa Sec Capital Markets; Nikko Cordial Securities Inc

Government and Agencies

Toshiba Corp

551.0

15/01/10

JPY

Nomura Securities

High Technology

Japan Finance Corp

550.5

15/01/10

JPY

Daiwa Sec Capital Markets

Government and Agencies

ORIX Corp

548.1

14/01/10

JPY

Nikko Cordial Securities Inc

Financials

Bank of Tokyo-Mitsubishi UFJ

547.8

20/01/10

JPY

Mitsubishi UFJ Securities Co

Financials

JFM

492.8

13/01/10

JPY

Nomura Securities

Government and Agencies

JASSO

411.1

27/01/10

JPY

Nomura Securities; Mitsubishi UFJ Securities Co

Consumer Products and Services

Kansai International Airport

389.3

28/01/10

JPY

Daiwa Sec Capital Markets; Mizuho Securities Co Ltd

Industrials

Nomura Europe Finance NV

372.4

12/01/10

EURO

Nomura International PLC

Financials

Aichi Prefecture

337.1

05/02/10

JPY

Nomura Securities; Daiwa Sec Capital Markets

Government and Agencies

Fukuoka Prefecture

333.9

22/01/10

JPY

Mitsubishi UFJ Securities Co; Daiwa Sec Capital Markets; Deutsche Securities Inc

Government and Agencies

Kansai Electric Power Co Inc

328.8

14/01/10

JPY

Daiwa Sec Capital Markets

Energy and Power

Japan Finance Corp

328.7

05/02/10

JPY

Nomura Securities; Mizuho Securities Co Ltd; Mitsubishi UFJ Securities Co

Government and Agencies

Hanshin Expressway Co Ltd

280.9

04/02/10

JPY

Mizuho Securities Co Ltd

Industrials

Japan Expressway Holding

277.0

29/01/10

JPY

Mitsubishi UFJ Securities Co

Government and Agencies

JFM

273.8

13/01/10

JPY

Nomura Securities

Government and Agencies

JRTT

224.7

04/02/10

JPY

Mizuho Securities Co Ltd; Daiwa Sec Capital Markets

Industrials

JRTT

224.6

04/02/10

JPY

Mizuho Securities Co Ltd; Daiwa Sec Capital Markets

Industrials

Hankyu Hanshin Holdings Inc

222.7

22/01/10

JPY

Mitsubishi UFJ Securities Co

Industrials

Tadano Ltd

221.5

21/01/10

JPY

Mizuho Investors Securities Co

Industrials

Kanagawa Prefecture

221.1

05/02/10

JPY

Mizuho Securities Co Ltd; GSJCL

Government and Agencies

Metropolis of Tokyo

220.3

15/01/10

JPY

GSJCL

Government and Agencies

Narita Intl Airport Corp

219.8

03/02/10

JPY

Daiwa Sec Capital Markets; Mitsubishi UFJ Securities Co

Industrials

Ricoh Leasing Co Ltd

219.2

14/01/10

JPY

Nomura Securities

Consumer Products and Services

Metropolis of Tokyo

219.2

14/01/10

JPY

Daiwa Sec Capital Markets; Mitsubishi UFJ Securities Co

Government and Agencies

Fuji Media Holdings Inc

219.1

20/01/10

JPY

Daiwa Sec Capital Markets

Media and Entertainment

JTEKT Corp

219.1

20/01/10

JPY

Daiwa Sec Capital Markets

Industrials

Hitachi Capital Corp

219.0

13/01/10

JPY

Mitsubishi UFJ Securities Co

Financials

Japan Finance Corp

179.8

05/02/10

JPY

Nomura Securities; Mizuho Securities Co Ltd; Mitsubishi UFJ Securities Co

Government and Agencies

Acom Co Ltd

167.0

22/01/10

JPY

Daiwa Sec Capital Markets

Financials

Mitsubishi Materials Corp

166.3

29/01/10

JPY

Mitsubishi UFJ Securities Co

Materials

Osaka Prefecture

165.3

02/02/10

JPY

Mitsubishi UFJ Securities Co; Mizuho Securities Co Ltd

Government and Agencies

ADB

2,491.1

02/02/10

USD

Bank of America Merrill Lynch; Morgan Stanley; RBC Capital Markets; UBS Investment Bank

Government and Agencies

ADB

918.9

12/01/10

AUD

Commonwealth Bank of Australia; RBC Capital Markets; UBS Investment Bank

Government and Agencies

ADB

199.5

13/01/10

CHF

UBS Investment Bank

Government and Agencies

Korea Development Bank

747.9

03/02/10

USD

Bank of America Merrill Lynch; BNP Paribas SA; Daewoo Securities Co Ltd; HSBC Securities Inc; Morgan Stanley

Financials

Indonesia Indonesia Republic Japan

Philippines

South Korea

Korea Housing Finance Corp

373.6

28/01/10

KRW

Daewoo Securities Co Ltd; E Trade Korea Co Ltd; Woori Invest & Sec Co Ltd

Financials

Hyundai Steel Co

301.4

29/01/10

KRW

KB Invest & Sec; HI Investment & Securities Co

Materials

Kookmin Bank

281.4

28/01/10

JPY

Mizuho Securities Co Ltd; BNP Paribas (Tokyo Branch); UBS Securities Japan Ltd

Financials

LG Household & Health Care Ltd

267.0

15/01/10

KRW

Woori Invest & Sec Co Ltd

Consumer Products and Services

Korean Airlines Co Ltd

261.3

04/02/10

KRW

Daewoo Securities Co Ltd; Hanyang Securities Co Ltd; Tong Yang Securities; Kiwoom Securities Co

Industrials

Shinsegae Co Ltd

258.6

26/01/10

KRW

Hana Daetoo Securities Co Ltd

Retail

SK Holdings Co Ltd

214.5

01/02/10

KRW

Woori Invest & Sec Co Ltd

Energy and Power

Halla Engineering & Constr

178.0

15/01/10

KRW

Tong Yang Securities; Kumho Investment Bank; Kiwoom Securities Co; Woori Invest & Sec Co Ltd; KB Invest & Sec

Industrials

Doosan Heavy Inds & Constr Co

175.0

21/01/10

KRW

Korea Investment & Securities; KB Invest & Sec

Industrials

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market data | M&A >>

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Asian Legal Business ISSUE 10.2

market data | M&A >>

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FEATURE | forensic accounting >>

Forensic accounting The importance of forensic accounting and the forensic accountant on legal proceedings is explained by Deloittes’ Joanne Hui, the associate director, forensic & dispute services, in the forensic accounting team Q. How can lawyers work alongside forensic accountants to resolve issues for clients? n recent years we have seen more opportunities for lawyers and forensic accountants working together, in dispute and corporate fraud investigation cases. In many dispute cases a forensic accountant will be acting as an expert witness to help the court to understand technical issues relating to accounting and finance.

Forensic accountants become an integral part of the legal team.

They help to identify documents required in discovery, explain and understand transactions documented in accounting and financial records, perform financial analyses, quantify the losses and damages, prepare expert reports, and, if required, provide expert testimony in courts or tribunals.

In some investigation cases, such as in Foreign Corrupt Practices Act investigations, forensic accountants play an important role assisting internal or external lawyers, using their forensic accounting, business intelligence, and forensic technology skills.

I

Q: What are some of the tasks you’re required to do as a forensic accountant, for example, on a litigation case?

In a litigation case the forensic accountant will usually be appointed 62

as an expert witness, so it is important that forensic accountants understand the facts of the case. Although forensic accountants do not deal directly with the legal issues, it is always useful for them to understand the legal basis of the claim upon which the loss/damage is assessed.

At the outset, the terms of reference are agreed with the instructing solicitor so that the issues to be addressed by the forensic accountants are clearly defined.

Next, the forensic accountants will also need to know what assumptions they will act upon. They then assist in identifying the documents and records necessary to be able to form an opinion, which must be robustly supported by evidence. This narrows down the selection of accounting documents to be requested during the discovery process.

The solicitor will usually be inundated with document so the forensic accountants will assist in focusing on the relevant documents and identifying any missing material.

When requesting information from the other party, the solicitor may seek advice from the forensic accountants on the purpose of the requested documents and assess their relevance.

Before the trial, there will be an exchange of expert reports and ‘without prejudice’ meetings of experts to agree or disagree on issues. This helps to narrow the issues in dispute, saving time and costs at trial. A joint

statement will be issued stating the points agreed and disagreed upon.

There will be continuous discussion between the experts and their instructing solicitor and counsel on the overall approach and cross-examination strategies, and the experts will also be involved in trial preparation.

Q: Do you think the financial crisis has caused more Asian firms to use forensic accounting services?

We’ve noticed that there’s been a growing demand for forensic accountants since a wave of corporate scandals originated in the US. This is coincident with regulatory changes that have prompted companies to take both pro-active and reactive measures to prevent and combat fraud.

Considering the non-cyclical nature of the forensic accounting advisory business, a challenging economic environment does not impede demand for these services. In a recessionary economy, more fraudulent activities tend to surface and thereby invite opportunities for fraud investigations and litigation support work.

Q: What (if any) new regulatory developments/laws have changed the practice of forensic accounting in Hong Kong that lawyers must know about?

The Civil Justice Reform (CJR) which Asian Legal Business ISSUE 10.2

FEATURE | forensic accounting >>

came into effect in April 2009 contains a new code of conduct for expert witnesses, which includes the requirement that an expert witness has an overriding duty to help the court. An expert witness is not an advocate for a party.

Further, the expert report will not be admissible unless the experts declare in their report that they have read the code, understand their duty to the court, have complied with and will continue to comply with that duty. The expert report will also need to be verified with a statement of truth, where the experts declare that they believe the contents of the report are true and the opinion expressed in it is honestly held.

In summary, forensic accountants should remain independent, objective and impartial when writing an expert report, instead of acting as an advocate for the instructing solicitor.

Q: Have there been any interesting cases you’ve been involved in recently?

I recently worked on an arbitration

“There’s been a growing demand for forensic accountants since a wave of corporate scandals originated in the US, coinciding with regulatory changes that have prompted companies to take both pro-active and reactive measures to prevent and combat fraud” case where a luxury fashion house (‘Company A’) entered into an agreement with another company (‘Company B’) to grant a sole right and license to operate a business at a sales outlet. However, Company A had been supplying products to Company C before contracting with Company B. Although there was no formal agreement governing this relationship, the keen competition from Company C aggravated Company B and led to arbitration proceedings. Company B hired a forensic accountant and prepared an expert report on the loss

Joanne Hui

Deloitte & Touche

of earnings suffered as a result of the breach of contract by Company A. We were engaged by the internal legal counsel of Company A to assess the reasonableness of the quantum of the loss of profit. We also provided a critique on the assumptions and methodologies employed by the opposing party's forensic accountant in arriving at their stated damages / loss of profits, and developed our own calculation of the damages / loss of profits claim.

The client used our calculation and reached an out of court settlement with the other party. ALB

Associate General Counsel – Asia McKinsey is looking to hire a lawyer to join our Asia-Pacific legal team.

This new position can be based in either Singapore, Hong Kong, Shanghai or Beijing.

The position encompasses a diverse range of responsibilities, including developing and negotiating a variety of contractual arrangements with our clients and third parties, providing counsel to our consultants on a variety of engagement-related legal issues covering information sharing, third-party disclosures, M&A-related issues, potential conflicts of interest and antitrust issues and providing counsel to our consultants on issues of professional or reputational risk.

The ideal candidate will have around 4-5 years post qualification experience as a corporate lawyer, currently with a top law firm or in-house legal department, with experience in general corporate matters and preferably having regional experience.

Excellent written and oral communications skills are required with fluency in English and Chinese a must.

The role is highly autonomous and requires impeccable business judgement/ ethics with an ability to develop strong internal relationships. The successful candidate will be a confident team player with a strong presence and ability to present well.

McKinsey is a premier, global management consulting firm. We have over 17,000 employees in 89 offices in 50 countries.

We aspire to help the world’s leading business, governments, and institutions make distinctive, lasting, and substantial improvements to their performance and tackle their most difficult and serious challenges.

If interested in this position please send your CV to: Malerie Fung McKinsey & Company, 25 Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong Direct: 852 2826 1252 Email: malerie_fung@mckinsey.com

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